Materials shortage 'disproportionately affecting small builders', claims FMB

The fastest rise in construction activity since 1997 risks being undermined by price increases and a shortage of building materials, warned the Federation of Master Builders (FMB) in response to the latest Construction PMI data.

The seasonally adjusted IHS Markit/CIPS UK Construction PMI® Total Activity Index found that construction work in the housebuilding sub-category increased at the fastest pace since November 2003.

However, imbalanced supply and demand has resulted in rapid cost inflation across the construction sector in June, with average prices paid for products and materials having increased at record pace.

According to Tim Moore, economics director at IHS Markit, survey respondents widely reported delays due to low building material stocks, shortages of transport capacity, and long wait times for items sourced abroad.

“Escalating cost pressures and concerns around labour availability appear to have constrained business optimism at some building firms,” he added.

Brian Berry, chief executive at the FMB, commented: “The building materials shortage is disproportionately affecting small builders and threatening their recovery from the pandemic, despite strong growth in the construction sector. 

“The materials shortage is proving a serious detriment to both businesses throughout the supply chain and consumers. 

“As the country reopens for business, it’s imperative that building firms have better access to the materials they need to build.”

Brian stated that while the significant surge in activity in the construction sector is very encouraging, the lack of materials needs to be addressed before jobs and business continuity are compromised.

“Small firms form over 90% of the construction industry and they are experiencing the most difficulties as a result of these shortages,” he added.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “The meagre availability of raw materials placed obstacles in the path of stronger workflows where supplier delivery times extended into record-breaking territory once again and surpassed the height of disruption when the pandemic first hit. 

"A lack of delivery drivers and logistics difficulties for EU imports left stock undelivered or unavailable and construction companies waited while costs mounted. 

"These malfunctions in supply chain performance may be a global issue, but this doesn’t help UK builders who are ready but unable to return fully to projects, which was reflected in the lowest optimism since January. 

“This surge in activity will lose momentum while labour availability, along with key materials, remain elusive."

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