Supply delays , is this too much demand, Brexit or Covid 19 ?
The Construction Leadership Council (CLC) has said that high demand for construction products is likely to continue for at least the rest of this year, and that construction sector companies “should not expect any improvement” when it comes to supply chain issues over the coming months.
A statement from the co-chairs of CLC’s Product Availability working group, said that even though demand for construction products is not as high as was in the summer – mostly due to “softening in residential DIY and repair, maintenance and improvement projects” – the market is still extremely strong and is expected to remain so for the rest of 2021.
“While product supply has improved in some areas, several critical challenges remain, particularly around logistics and related labour shortages, and rising product and input costs,” the CLC said.
“The shortage of HGV drivers remains the most critical issue across the board, cited by many as a key risk involving not only late deliveries but hiring, retention and wage inflation.”
In addition to the HGV driver situation, for which no improvement is expected until at least the first quarter of next year, the delivery of raw materials, products and components are also continuing to be affected by global shipping issues.
“Some UK ports also continue to struggle, with their problems exacerbated by the shortage of HGV drivers causing further delays in moving products from the ships onto the road network. These issues, both global and domestic, are expected to continue well into 2022,” said the CLC.
There are also warnings that high gas and electricity costs and associated carbon costs, which are impacting both UK and overseas ‘heavy-side’ manufacturers, will soon lead to significant price increases across the board
The CLC, which works with the construction firms and the government to identify and deliver actions to support the UK construction industry, is also expecting the price of cement – and consequently concrete products – to rise as a result of the increased energy costs.
The supply chain issues and raw material shortages are also anticipated to impact the supply of paint and coatings products, increasing both lead times and prices.
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