Tips for avoiding shortages on building projects as ONS data suggests construction industry slow down

  Posted by: electime      28th June 2021

Latest figures from ONS suggest that construction growth is slowing despite growth earlier in the year. Highlights from the ONS Construction output in Great Britain Report June 11th report:

• New construction work is slowing down – output fell 2.0 per cent in April following previous growth in March (5.8 per cent)
• 2.9 per cent decline in new work and 0.6 per cent and repair and maintenance
• Monthly construction fell to £13,961 in April
• Anecdotal evidence suggests delayed projects could be responsible
• However output stands slightly higher than pre-pandemic February 2020
• The biggest decline has been in private housing, which fell 11.1 per cent in April

Rising costs, bottlenecks and delays in supply chains caused by Brexit and Covid-19 are starting to have a negative impact on construction projects in the UK. Supporting this, Google searches for the term ‘building shortages,’ taken from Google Trends, have seen a 158 per cent increase in the UK between April 1st and June 22nd.

We spoke to Johnpaul Manning, owner of building supply store Build4Less, for his insight into the ONS data and the UK’s material shortages as well as his top tips for builders and contractors to alleviate shortages on their upcoming building projects.

“The construction industry has faced unprecedented challenges recently – Brexit, the Suez Canal and especially Covid-19 – have all caused significant disruption, in the form of delays to supply chains and projects and a drastic impact on the prices of building materials.

“The latest ONS figures suggest a uge impending impact on summer building projects. It does seem like materials from every corner of the globe have been affected in some way. Timber has seen global shortages since March 20 and it’s now looking unlikely that any timber which hasn’t been pre-sold prior to the pandemic will make it to UK shores. Steel has faced issues since 2020, with shutdowns leading many manufacturers to play catch up. Even concrete, a core material and one that is usually quite easy to get, has been adversely affected in ways we’ve never seen before.

“With all that going on, it’s an especially difficult time for the construction industry, particularly for self-builders who don’t have a main purchaser to help with logistics and deliveries. It’s looking increasingly likely that these challenges will extend through the summer, lasting at least until the end of the year as manufacturers catch up with demand. Things are almost certainly going to get worse before they get better. With that in mind, there are a few things that self-builders and construction firms can do to try and mitigate the delays and shortages on their projects.

Plan ahead, know in advance which materials are facing the biggest delays

“This is tough, because the shortages are so widespread, but knowing in advance where the bottlenecks are will be helpful because you won’t get caught out half way through the project. Construction timber is in short supply, as not enough timber is being made to meet the world’s demands. With other countries now willing to pay more for timber, the UK has fallen further down the priority list. Likewise, steel, plastics, cement and aggregates have also started to join the list of increasingly hard to find products, and even bricks, screws and roof tiles are starting to see delays. Research which of your materials are most at risk and plan ahead.”

Reassess any upcoming work and push back future projects if finances allow for it

“Think in six month windows – where will delays affect your business in future? It’s a sensible time to reassess the volume of upcoming work and cut back if things are looking uncertain. Maybe be cautious about taking on new projects at this time and assess how vulnerable your clients are to any economic slumps.”

Check in with suppliers on their availability and lead times in advance and if possible, diversify your suppliers

“Communication between yourself and suppliers is more important than ever – reach out to them – before they come to you – and get an understanding of how Covid-19 has affected their business. Depending on where you are in the chain, it can be hard to know where the shortfalls are going to come – it may be as far back as factory level – but knowing where the problems will potentially come from is always going to help. Are your suppliers having issues which will affect your projects and contracts?

“Think about any vulnerabilities in the supply chain, and ask where these will affect you – whether this is financially, legally, and ask what impact it could have – contracts, loan repayments, cashflow? Remember everyone is affected, and it’s in everyone’s best interests to get the process back up and running as smoothly as possible. If you can’t reach solutions with your suppliers and lead times are too long, is it possible to diversify to find an alternative?”

Order materials as as soon as possible and leave nothing until the last minute

“It’s increasingly looking like the delays are going to be with us until the end of the year. With that in mind, the earlier you order the materials the better things will be.”