Group says contractors finding it difficult to justify price rises to clients ‘because of lack of detailed explanation’ accompanying increases
The war in the Middle East has helped add an extra 5% to the cost of materials, the Construction Leadership Council’s material supply chain group has said.
An update published this week by John Newcomb, chief executive of the Builders Merchants Federation and Peter Caplehorn, chief executive of the Construction Products Association, co-chairs of the CLC’s materials group, admitted: “The impact of cost inflation on building materials has already been substantial.”
It added: “Builders’ merchants reported that standard January price increases have added 2.2% to the cost of goods, and the annualised impact of Middle East- related increases to date has added a further 2.9%, taking the total increase to around 5.1%.”
It said there was a “lack of detailed explanation accompanying price increases” which meant contractors were finding it “difficult to justify and communicate these costs to clients. Clearer evidence and transparency would be welcomed.”
It said the impact of price rises in materials was also trickling down to consumers who were being put off moving home which was compounded by uncertainty over mortgages.
“A fundamental issue, particularly for SMEs and housebuilders, remains the consumer’s capacity to absorb price increases, particularly with the withdrawal of a large number of mortgage products. The lack of consumer confidence is a key constraint,” the update added.
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