Construction Product Availability Improves

Statement from John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association, co-chairs of the Construction Leadership Council’s Product Availability working group:

The past month has seen yet more improvements in the balance of product demand and supply, with good availability for most construction products and prices no longer as volatile.

While demand has slowed in recent months, work in every major construction sector, apart from commercial, remains above pre-pandemic levels.

The slowdown has allowed brick manufacturers to rebuild stocks to their highest levels since May 2021. While there are some exceptions, manufacturers are reporting up to 8 weeks supply for most brick types at current demand levels.

The availability of gas boilers has also improved. With their supply chains returning to normal levels, availability increased by over 20% in January 2023 compared with January 2022.

Wholesalers in the electro-technical sector report their number one operational challenge is still “product availability and price issues” with longer lead times experienced for solar products including inverters, batteries and mounting systems.

In addition, the problems in the supply and pricing of EV chargers linked to regulatory changes, reported in detail in our January statement, remain a major concern. Installers should check the provenance with their wholesalers and request a Statement of Compliance and, if applicable, an Enforcement Undertaking.

Currently, there are large stocks of most grades of timber in the UK.  The exceptions being birch plywood and Siberian larch cladding, which come from Russia, but substitute products are available.

As reported last month, price inflation has largely stabilised with some suppliers deferring price increase as demand slows.  Gas prices appear to be easing and many larger energy intensive manufacturers have likely hedged a high proportion of their energy costs for the year ahead. Nonetheless, the impact on manufacturers from high energy costs often takes months to feed through to product prices – especially for energy-intensive products and materials – so the volatility from late 2022 may still be felt into the spring. Inflationary pressures on other costs, especially labour, continue and may well impact prices later in the year.

The Product Availability Group is monitoring potential impacts from the earthquake in Turkey that could disrupt supply chains.  While nothing major has been reported to date, Turkey is one of the world’s largest exporters of raw iron bars and Turkish ports are key connections for steel rebar and structural steel global trade. There may be longer term ramifications, for both materials and labour, when rebuilding begins.

Source : Construction Leadership Council

Image : Pexels / life-of-pix (2469)

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