Uncertainty over price rises is leading contractors to think twice before entering contracts

Some construction material suppliers will only hold tender price quotes for 24 hours due to spiralling price inflation, according to the Construction Leadership Council (CLC).

The group said inflation remained “the major concern”, with uncertainty around prices leading contractors to think twice before entering fixed-price or long-term contracts.

Volatile energy prices have also begun impacting markets across Europe, it reported, with manufacturers of energy-intensive products warning of surcharges.

The CLC said UK manufacturers were managing stocks and the supply chain after reports of cement plants closing in Spain due to spiralling energy costs.


UK manufacturers are managing stocks after reports of cement plant closures in Spain

The warning came in a joint statement from Builders Merchants Federation chief executive John Newcomb and Construction Products Association chief executive Peter Caplehorn, co-chairs of the CLC’s product availability working group.

Despite strong demand for materials, the pair warned that there were signs of softening and a shift in the balance of demand. Some regions reported a decline in retail sales for DIY and home improvement products, though this was compensated by higher volumes of trade sales.

While the statement reported good stocks of most products, the pair repeated warnings of supply challenges affecting products including bricks, aircrete blocks, gas boilers, plastic products dependent on polymers and electrical products using semi-conductors.

The quiet winter months have seen brick and block stocks increase, but Newcomb and Caplehorn urged builders to plan ahead as the market accelerates in spring. “It will be essential for builders to plan ahead and work with manufacturers to ensure timelines of availability,” they said.

The boiler market, meanwhile, has been impacted by unprecedented demand coupled with supply challenges for steel, cardboard, plastics and electronic components – though manufacturers are hopeful that supply and demand will normalise by the year’s end.

Lockdowns in China and the war in Ukraine could affect prices of paints and coatings, and possibly their availability, in the coming months.

After a turbulent period, The CLC reported stable prices for timber and good stocks, with fewer problems reported with the ports and haulage. “We note, however, that the market for MDF has seen marked price increases due to the soaring cost of oil derivatives which are key components in MDF resins and the melamine surfaces applied to such panels for use in kitchen and bathroom furniture.”

Supplies of ceramic tiles and sanitaryware could also be affected by the invasion, said Newcomb and Caplehorn.

The product availability working group is to meet every three weeks to respond to changing conditions arising from price inflation and the war in Ukraine. ”The war is already impacting the global shipping industry,” the CLC said.

”Many countries have banned ships associated to Russia in any way. More widely, shipping lines are suspending or changing bookings because of sanctioned cargo, and congestion at ports is increasing owing to more stringent customs checks.

”In addition, Ukrainian and Russian nationals account for 15% of the global shipping workforce. With President Zelensky calling for all Ukrainians to return to fight, a severe workforce shortage could soon become apparent.”