Metals and electrical goods seeing double-digit rises, group adds

The impact of war in Ukraine on UK construction is “only beginning to be felt”, according to the Construction Leadership Council (CLC).

The CLC said there were reports of prices of nickel – supplied in large quantities by Russia and a key component of stainless steel – doubling since the conflict began.

The council said that rising metal prices, together with a shortage of supply from neon producers in Odessa and Mariupol, and bottlenecks for microchips and semiconductors from Asia, meant the electrotechnical sector is experiencing inflation on products above 20%.

steel

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Steelwork production in Mariupol has been hit because of Russia’s bombing of the city

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

They said the impact was greatest for small and medium sized firms and that after a busy first quarter, there were signs of falling home improvement demand in March, compared with the same time last year.

“Without price continuity, it is harder for trades to quote for projects on fixed price contracts, and then seek to pass onto their customers any price increases for materials that would otherwise erode their profit margin,” they said.

“Furthermore, as manufacturers reprice materials and SME contractors continue to be required to sign up to fixed price contracts in advance of project delivery periods, considerable pressure is mounting on SMEs at delivery level.”

As well as increases in the price of steel and electrotechnical goods, the pair also warned that rising oil prices would affect both fuel and plastics.

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Newcomb and Caplehorn also reported that energy-intensive products such as steel, cement and glass had experienced 10-15% inflation over the past three months.

In terms of current product availability, the statement said most products remained in good supply, but challenges remained for bricks, aircrete blocks, some imported sanitaryware and gas boilers.

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