Rapid surge in demand could result in material supply issues, says CLC

A rapid increase in demand for construction projects would be difficult for the existing materials market to supply, according to the Construction Leadership Council.

The organisation’s material supply chain group said the slowdown in demand over the past two years had “led to a reduction in supply and stock levels”.

“While this has been more than adequate for current conditions, a rapid surge in demand in the coming year may result in supply issues,” said group co-chairs John Newcomb and Peter Caplehorn in a statement.

The pair, who are chief executives of the Builders Merchants Federation and Construction Products Association respectively, said the second half of this year had seen more investment, leading to a stronger pipeline of new orders.

They also pointed out that, while new housing remained flat, the government was working on plans to stimulate the market, with a goal of building 1.5 million homes in this parliament, an average of 300,000 homes a year.

Brick capacity in the UK is around two billion currently, which is half what it was in the 1970s when the UK last built that volume of homes.

“Added to this, much of the structural timber used in the UK is imported from Europe,” they said.

“While the UK has stock on the ground at the moment, log prices have increased in Sweden and suppliers are able to manage supplies to achieve the price they want. 

“If the UK wants to expand the use of timber construction, we will have to compete for its supply within a global market.”

Caplehorn and Newcomb also warned of price increases for several products in January ranging from 3% to 8%, largely stemming from higher energy costs. 

The group said product availability was currently good overall and that previously reported issues regarding aerated blocks continued to be managed by allocated supply.