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Will building materials go down in 2022 UK?

When will the materials shortage end? Not yet. According to the CLC, pressures on global shipping, including delays and volatile prices, look set to continue well into 2022.

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Architects and the wider construction industry were hit hard by materials shortages in 2021. The supply chain crisis led to skyrocketing prices and huge lead times on materials such as timber, playing havoc with projects up and down the country. Government statistics show that material costs rose every month between September 2020 and September 2021. Going into 2022 the shortages look to be easing, yet some key products still remain in short supply. In an update last week, the Construction Leadership Council (CLC) said it appeared the Omicron Covid variant had only inflicted ‘limited’ disruption but that prices remained a concern, with multiple increases expected. The architectural profession is still being hit by the shortages. The RIBA’s most recent Future Trends report reveals cost inflation, twinned with shortages of both materials and people, is causing project delays and making tendering increasingly difficult. Our explainer takes stock of the latest information on the supply chain and provides information on which materials are facing price rises or shortages heading into 2022.

What is causing the ongoing materials shortage?

A number of factors. The industry has not recovered from the devastating impact of the first wave of the Covid-19 pandemic. At its peak, material production slowed but demand increased as homeowners embarked on improvement projects during lockdown, piling even more pressure on supply chains. There is also still a lot of uncertainty around Brexit. New regulations and delayed shipments mean materials from overseas are harder to come by. Labour shortages have also played a part, such as the lack of HGV drivers and scarcity of construction workers.

Which materials are affected?

Timber

Imported timber was one of the materials worst-hit by the supply crisis but, after record-breaking imports, the situation has returned to more normal levels and prices have fallen from the highs of last summer. The Timber Trade Federation (TTF) said last week that ‘stability’ had returned to the market and stocks had been replenished. ‘However, the market is still some way off “normality”, as Brexit, HGV driver shortages and Covid-19 disruption continue to affect supply and demand, as well as labour availability,’ the TTF said. The CLC says longer lead times may return as the volume of demand increases later in the year.

Bricks and blocks

The high level of demand means that a shortfall in the domestic production of bricks will continue throughout 2022, according to the CLC. This is until three new UK brickmaking plants start production in 2023 and 2024, together expected to produce 150 million bricks a year. The Brick Development Association suggests that, with demand expected to remain high, lead times will be an issue for the coming year.

Cement

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Cement production dropped by 11.4 percent in 2021, according to BEIS, and supplies of bagged cement have been strained since late last year. The CLC has said that, while availability has eased at the moment, shortages could return.

Steel

Last summer, British Steel stopped taking orders on structural steel sections due to ‘extreme demand’ and prices shot up. However, the situation has now improved. British Constructional Steelwork Association (BCSA) chief executive David Moore told New Civil Engineer: ‘Steel prices are as stable as those of any other construction material and its supply chain is performing strongly.’

Roofing products

Roofing products are still hard to come by. According to a survey by the National Federation of Roofing Contractors (NFRC) and industry tracker Glenigan, 92 per cent reported a rise in prices and 77 per cent of roofing firms reported a deterioration in availability. The CLC this week reported lead times averaging 24 weeks and rising to 41 weeks for some profiles. Additionally, clay tiles are subject to price increases, due to rising energy costs.

Are prices still going up?

The situation is still volatile, but the most recent statistics produced by the Department for Business, Energy and Industrial Strategy (BEIS) show prices for materials have levelled out for the first time since September 2020. The data shows costs did not rise in November last year and the prices of steel and timber, two of the materials to see the biggest rises in 2021, came down. The price of imported sawn or planed wood dropped by 7.6 per cent (though still 52.4 per cent more expensive than it was a year ago), while steel prices went down by 0.3 per cent month on month (yet steel remained 66 per cent more expensive than it was in November 2020). Building materials supplier Jewsons’ January update reveals manufacturers are continuing to hike prices due to ‘unprecedented global demand’ as well as increased transportation costs and operational procedures such as social distancing.

What impact is the materials shortage having on architects?

Architects have been hugely affected. According to the RIBA’s November Future Trends report, scarcity of materials was causing on-site delays for 74 per cent of practices, with over a quarter reporting site work being put on hold. A quarter now report delays in the design process, up from 18 per cent in June. Construction News reported this week that 9 in 10 large construction projects (over £100 million) are currently behind schedule. The price hikes meant it was challenging for architects to budget and a restricted range of products was making sustainable design more difficult, according to the RIBA analysis.

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We’ve considered alternative suppliers on projects

Luke Tozer, director of London practice Pitman Tozer, said the delays were extending programmes and causing the practice to have to reallocate staff when projects were slow, though he added this was a ‘normal part of business management’. He added there was still strong demand for affordable housing but some projects had ‘taken longer to get into contract, required more value engineering to meet the budget and been slower to start on site’. Regarding materials swaps, Tozer said: ‘We’ve had to look at some brick specifications again and we have considered alternative suppliers on projects. For one offsite project the suppliers’ lead time recently went from four months to 11 months from order, which is hardly helping to provide the homes people need.’ As for builders, a recent survey by the Home Builders Federation revealed 78 per cent of housebuilders said the supply and cost of materials such as bricks, timber and cement posed a huge problem.

When will the materials shortage end?

Not yet. According to the CLC, pressures on global shipping, including delays and volatile prices, look set to continue well into 2022. It added that, while the issues previously affecting timber and cement availability had eased, they have not been fully resolved, and longer lead times may return when demand increases later in the year. The government has been urged to intervene to help the sector find ways around shortages as they arise. Last year the National Federation of Builders called for ministers to step in and urge councils to show greater flexibility on materials changes, while the Building Back Britain Commission warned in November that the government’s housebuilding targets might be at risk. As for construction worker shortages, London Mayor Sadiq Khan last week called on the government to create a temporary visa scheme as vacancies in the industry hit a 20-year high.

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