Rising Costs in the Construction Industry

We’ve been asked loads on the affects of rising costs in the industry at the moment – things like ‘what are you seeing Matt, how are you tackling it, how are you communicating it to the team and why and when is it going to stop?’

I’m open and always have been with our clients and supply chain. Without our suppliers we couldn’t provide turn around building refurbishments in time or offer budgets on buildings in the way we do without open dialogue.

Without question its well known that COVID-19 began a spiralling affect on raw prices on everything around it - just look at Labour - the furlough affect and amount of jobs that were lost during this time. The knock on affect we are still seeing in the aviation sector in the news now with plane lines not being able to take to capacity due to demand.

Then came BREXIT! What I mean is the exit of the European Union of course - the constant barrage of increasing levy taxes at ports and companies based outside the UK taking advantage on our steel industry for example has meant we’ve seen astronomical price increases. Basically everything has increased … this has meant our clients, some Developers, are working with us hard to secure earlier orders to lock in prices before they rise again.

 “Structural steel and rebar prices recorded double-digit inflation from March to April as supplies struggled to meet demand.

Data released by the Department for Business, Energy & Industrial Strategy (BEIS) this week showed the price of fabricated structural steel increased by 13.5 per cent. It is the biggest jump since the government asked the Construction Leadership Council to keep tabs on material shortages and costs earlier this year. The price of structural steel is now 31.8 per cent higher than it was in April 2020” (1).

We use the BCIS index to help us estimate and live costs from our supply chain that enables open dialogue with clients on values they are looking for early doors to enable investments to happen or not in some cases.

Being registered for live updates to marketing construction material keeps us up to date with surrounding factors affecting the industry as well.

Doing the above enables us to provide realistic prices as of today with risks highlighted and cut off dates which help us all.

Our biggest and most potent thing we’d like to say here is early engagement saves time and money for everyone. Unfortunately, I can’t answer when this price spiral will stop, but by working collaboratively, earlier in the projects, we can lock in material and labour prices together.

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Sources:

1. Taken 13/06/2022: https://www.constructionnews.co.uk/supply-chain/structural-steel-and-rebar-prices-show-double-digit-price-rise-03-06-2021/