How Construction is Dealing with Rising Material Costs

The skyrocketing costs of a range of popular building materials is currently a significant challenge in the construction sector, with prices rising by a huge 15.6% over June and July 2021.

The causes of this major drawback appear to be a combination of trade related uncertainty in the aftermath of Brexit and labour shortages as a result of the COVID-19 pandemic. 

What’s more, the first UK lockdown sparked a frenzy of home improvement activity, creating an increased demand for materials that remains way above typical levels despite the current shortages - a matter that is pushing prices up still further.

The shortages can be traced right back to some of the most commonly used raw materials in the industry, including cement products, timber, steel and some electrical components.

As a result, a range of projects from domestic DIY to large scale construction will continue to experience fundamental hold-ups for the foreseeable future.

It is likely to take some time for availability to return to normal. In the interim, the prices of both materials and labour will continue to be forced up by these shortages. 

So, what can construction professionals do to tackle this issue effectively and keep moving forward? In this article, we explore just a few of the approaches that are being used to keep the industry running as effectively as possible.

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Postponing Projects

In some circumstances, there is sadly no other option but to delay or “park” projects until it is possible to acquire the materials needed to complete them on-budget - or as close to this as possible.

With no sign of a return to normal availability before next year, many firms are in for a long wait for affordable materials - and, for some, a complex financial balancing act must take place when deciding whether to push on, press pause or throw in the towel.

Of course, larger and more established companies are more likely to have access to the required capital to tide them over for as long as is required - making this a significant challenge for smaller independents and self-builders above most others.

Planning in Advance

Given the current challenges, it is highly advisable for construction professionals to put together as good an assessment of the materials they are likely to need as possible well in advance of a project beginning - in order to more safely guarantee its availability.

Suppliers will need to receive orders as soon as possible so that they can make sure they are able to provide construction teams with the correct amount of their ideal items. 

It may be necessary for building firms and other construction specialists to look elsewhere for certain materials if an order cannot be fulfilled in time via their usual supply chain or builders’ merchants.

Stockpiling

Stockpiling materials is not advisable, as this can contribute further to industry shortages and rising prices. The UK saw clear evidence of this effect during the periods of supermarket “panic buying” in the early stages of the COVID-19 pandemic.

If you have no alternative but to purchase significant quantities of materials in one go, you must ensure that you calculate everything as efficiently as possible to avoid overordering - as this can prove unnecessarily expensive and may cause major inconvenience to other firms.

Related to this, acquiring properties via national auction houses is also a good way to factor in the increased cost in prices.

Using Alternative Materials

In times such as these, it is highly beneficial to work with architects and designers that are flexible in terms of the mediums with which they are happy to work, and knowledgeable regarding the available alternatives.

It may be that replacement materials must be sought to stand in the place of those that are more difficult or costly to obtain. It may be that supplies that were once considered expensive may end up being the cheaper option due to the lack of availability of standard items.

It is best to keep all options open and apply creativity when it comes to sourcing affordable materials that can be delivered quickly and in the right quantities.

Recycling has quickly grown in popularity throughout the construction field in recent years thanks to its environmental benefits, but this approach may quickly become one of the best ways to access cheap materials quickly in the face of the current crisis.

With demand likely to remain high throughout the late summer and early autumn, UK construction specialists may face long delays before normal availability resumes.

Greater clarity regarding Brexit and progress involving the resolution of the COVID-19 pandemic is likely to go some considerable way towards improving the situation - but it is likely that these changes will take time.

In the interim, all projects - from small scale DIY to huge commercial construction ventures - will continue to take longer and cost more. Unfortunately, these challenges must be factored into all budgets and project plans for the foreseeable future.

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