FMB members suffer material price rises and predict more to come in 2017
Material price hikes caused by the weaker pound following the vote for Brexit have hit 70% of SME builders, according to trade body the Federation of Master Builders (FMB).
In its latest trade survey, the FMB found its members were expecting further price rises of between 10-15% this year. The FMB warned the price rises could be passed on to homeowners getting building work done.
Sarah McMonagle, director of external affairs at the FMB, said: “Anecdotally, construction SMEs are already reporting an increase of 22% in Spanish slate and 20% increase in timber. A quarter of all materials used by the UK construction industry are imported – this is significant and underlines the vulnerability of the industry to sudden fluctuations in the strength of our currency.
“The combined pressure of higher material prices and the rising cost of skilled labour represents a serious challenge to builders.”
McMonagle added: “What this means is that homeowners could start to see the cost of their building projects increase. It also means that consumer choice may be reduced as some homeowners face having to compromise on aspects of their project due to the fact that certain materials have become too expensive.
“There is also an added headache for the builder, as material price rises can come at short notice and if they are mid-project, the original costing is no longer accurate. This makes pricing jobs problematic and leads to construction SMEs having to cover themselves against sudden price swings.
“Some builders are attempting to mitigate this by introducing larger contingency funds when pricing for a job, or by stipulating in the contract that the overall contract price will change in the case of material price hikes, making client budgeting more tricky.”