As the UK continues to open up after a year of closures and other restrictions, the construction industry has been at the forefront of the economic recovery with activity levels at an all time high of seven years.
Soaring demand has strained the availability of a number of key materials, with some experiencing double-digit inflation.
Earlier this year, the UK government asked the Construction Leadership Council to monitor the situation, which prompted it to set up the Product Availability Task Force. In the months since its inception, it has added more and more items to its list of constrained products.
Construction News examines how some key materials have been affected and how the situation may develop in the coming months.
Last month’s CLC construction product availability statement said lumber remained among the “worst-hit product areas” for the construction industry.
In its market statement for May, the Timber Trade Federation (TTF) said inventory levels were languishing due to strong international demand, which had prevented UK-based buyers from replenishing their inventory since the start of the market. pandemic. Demand for timber has skyrocketed in the UK and elsewhere as home builders try to make up for progress they missed during shutdowns, says the TTF. The growing emphasis on net zero construction has increased demand, as wood has great potential for carbon storage, he said.
The federation also said Brexit complications were further crushing timber stocks in the UK, as 80% of the softwood used in construction comes from Europe. In new housing, 90 percent of softwood comes from the mainland. Timber is the third most imported building component according to the Department of Business, Energy and Industrial Strategy (BEIS), with the industry spending £ 816million on it last year.
Prices have skyrocketed in the past year, with the cost of sawn lumber rising 16.6% in March 2021 from 12 months ago.
Demand is unlikely to weaken anytime soon. TTF chief executive David Hopkins said Construction News: “There is no indication that demand is on the verge of falling as home builders continue to ramp up construction and requests for repairs, maintenance and renovations on the rise.
“The state of demand means the timber is being allocated as quickly as it is produced and imported into the UK,” he added. The timber market is expected to remain tight “until 2021 and beyond, with demand for softwood to increase worldwide until at least 2025”.
With sawmills in Europe normally closed during the summer for maintenance work and vacations, this could be “the new normal,” Hopkins added.
Cement was added to the CTC’s list of items facing shortages in April. But supply has improved, according to Nigel Jackson, chief executive of the Mineral Products Association (MPA). Bulk cement deliveries, which make up the majority of the UK market (over 80%), have “broadly returned to normal”, he said. CN. “We are not aware of any projects impacted by shortages of bulk cement,” he said.
For bagged cement (equal to around 18% of all cement sales in the UK), the shortages first seen in February continue, in part due to increased demand as the industry began to open up after the lockdown.
Supply has also been hit by production constraints, Jackson said. Demand slowed in the fourth quarter of 2020 and many companies have switched to furnace maintenance, which requires factories to close. Producers have also struggled to find carriers to transport cement across the country, according to Jackson.
Unlike wood, the vast majority of cement used in the UK is produced in the country. Jackson said growers will be able to “flex” to meet demand and shortages of bagged cement are expected to be resolved within months.
Global demand for steel exceeds supply. Earlier this month, the British Manufacturers Association of British Electrotechnical and Allied Manufacturers Association (BEAMA) reiterated that a dramatic cut in steel production in early 2020 caused a global shortage, although production started to increase in mid-2020. The association said “steel availability remains problematic,” which is expected to continue for months before easing.
British Steel stopped taking orders for structural steel profiles due to “extreme demand” last week and a director of a steel specialist said Construction news that he feared this decision would lead to a “panic buy”, making the situation worse.
As availability has decreased, prices have increased. According to BEIS, the price of manufactured structural steel rose 17.6% in March 2021 from the previous year.
The Electrical Contractors Association (ECA) said this month that demand for cable steel has skyrocketed as companies rushed to complete projects they had been forced to shut down due to the pandemic. ECA General Manager Steve Bratt said: “Our advice is to order the materials you need on time to make sure you can finish as planned. “
Official data showed that infrastructure was the first sector to surpass pre-pandemic production levels. This has resulted in an increased demand for aggregates. “We’ve never been so busy,” said Richard Bird, executive director of the British Aggregates Association. CN, adding that the biggest problem was finding enough trucks to transport the material. For now, the supply is sufficient to meet the demand, he added.
Bird warns that shortages could increase as infrastructure projects scale up. “Once HS2 is launched, there could be shortages because all the aggregates will go on it,” he said.
Meanwhile, government legislation to decarbonize the economy and ban red diesel used in excavators and other facilities and machinery will force the aggregates industry to replace a huge proportion of its vehicles, according to Bird. “That means our prices will go up,” he says, perhaps by as much as 150 percent.
A CLC report released in April said plastic products were facing supply challenges due to increasing global demand and plant closures outside the UK. Shortages of raw materials have also limited the production of polyethylene and polypropylene plastics.
According to a report by Plastics Information Europe, plastic prices have risen as stocks run out. For polyethylene, commonly used in the production of pipes, the organization said that “it was the producers who dictated the prices because many stocks were almost empty”. Meanwhile, there is “no end in sight to the price rebound” for polypropylene plastics, the report said. Polypropylene is used to make roofing membranes, which the CLC added to its shortage list at the end of April.