Materials prices set to rise 10% as market booms

Grant Prior 3 years ago
Share

Surveyors are braced for a 10% rise in materials prices over the next 12 months as the construction supply chain struggles to keep up with increasing workloads.

Shortage of staff was also flagged as a major problem in the latest RICS Construction and Infrastructure Survey for Q2 2021.

A +38% (net balance) of respondents reported rising workloads with the private residential sector and infrastructure leading the way.

The survey found 82% of respondents experienced  a shortage of materials, up from 57% previously, while the cost of materials is expected to increase by nearly 10% over the next twelve months – ahead of the 7% growth anticipated for tender prices.

Shortages of skilled labour and ‘white-collar’ roles were also widespread.

Surveyors predict construction workloads will continue to gather pace, with a net balance of +55% saying more activity is expected next year.

Simon Rubinsohn, RICS Chief Economist said: “The tone to much of the feedback received in the Q2 Construction and Infrastructure Monitor is pretty upbeat with new business enquiries picking up smartly and this being reflected in the expectation that workloads will continue to grow strongly over the next year.

“Infrastructure and private housebuilding are viewed as likely to remain the most buoyant areas of the industry. Yet it is abundantly clear that a couple of issues present big challenges. Most notably at this point, the availability of building materials stands out as a key problem for respondents to the RICS survey.

“But almost as significantly, labour and skills are increasingly being cited as obstacles for businesses looking to build out existing commitments or embark on new projects. For the time being, the issue appears most visible regarding skilled trades but quantity surveyors are also being highlighted as an area of growing shortage.

“Unsurprisingly against this backdrop, some concern is being expressed about rising construction costs.”

Latest news

Staff stunned as engineering consultancy Clarkebond closes

Firm was only bought three months ago by rival Independent Design House Group
2 days ago

Vistry issues third profit warning in three months

Profit expected to fall £50m below forecast due to delayed completions
2 days ago

Miller Homes buys St Modwen Homes for £215m

Scottish house builder snaps up £368m turnover rival
5 days ago

Keltbray fine increased to £18m after failed bid rigging appeal

Contractor loses penalty discount for settling with competition authorities
6 days ago

Luxury house builder goes under with 70 job losses

Octagon Developments in administration after 40 years in business
6 days ago

Top Ten best read stories of 2024

The biggest headlines of an eventful year. Have a good one and here's to a successful 2025
7 days ago

BAM Nuttall fined £800,000 after concrete skip tragedy

Young labourer killed by falling bale arm
1 week ago

Keltbray infrastructure business reveals new name

AUREOS means "new dawn" after private equity acquisition
6 days ago

Stiffer fines for over-running street works from next Summer

Cash raised from lane rentals to be channeled into pothole repairs
6 days ago

£113m Basildon rental homes scheme seals build finance

Work expected to start early next year on Market Square project
7 days ago

Notting Hill Genesis seeks more tier 1 repairs contractors

London housing trust seeks eight firms for new £1.5bn repairs framework
7 days ago

Reclaimed steel oil rig columns worked into London office revamp

Curo will use reclaimed bricks and steel for Fitzrovia office overhaul
1 week ago

CITB delays levy approval consultation

Levy agreement talks pushed back by ongoing review into effectiveness of training body
1 week ago

Ofwat approves £104bn water industry spending plan

Household water bills to rise by 36% to fund quadrupling of investment
1 week ago

Costain/ Siemens JV clinches HS2 power supply job

£300m deal for HV power supply systems over the 225km route
1 week ago

Demolition team assembles on Multiplex London Wall site

Erith to start work next month at Deutsche Bank's former headquarters
1 week ago

Norwich Council acts to revive £300m Anglia Square scheme

Council uses Homes England funding to buy stalled site with planning for 1,100 homes
1 week ago

Go-ahead for 4,500-home Cambridgeshire new town

Waterbeach new town plan stalled three years ago after an Environment Agency objection
1 week ago

Henry Boot to take total control of Stonebridge Homes

Deal worth at least £30m
1 week ago

HS2 costs could hit £66bn

Government looking for next estimate to be lower
1 week ago

Mace to close construction logistics arm

Specialist business being wound down
1 week ago

National Grid to invest £35bn over next five years

Plan set out for record investment in electricity transmission infrastructure
1 week ago

Profits double at Barhale

Civils specialist sees order book top £1bn
1 week ago

Balfour wins 68km HV underground power cable deal

Main works to start next year on Eastern Green Link 2 job
1 week ago

Stunning site wrap unveiled on Sloane Street

Hoarding creates illusion of fully formed façade on £53m Galliford Try job
1 week ago

Heathrow Airport upgrade spend takes off again

Airport operator will spend £2.3bn over the next two years
1 week ago

Government buys back over 36,000 military homes

Public ownership deal to release wave of upgrade and new build work
1 week ago

Story Contracting staff braced for rail job losses

Work coming through slower than expected from Network Rail
1 week ago

Ballymore submits two plans for 3,700 East London homes

Construction could start in 2025 on Thames Road and Knights Road schemes
1 week ago

Blackpool council steps in on failed developer’s £300m scheme

Blackpool Central site clearance to start in the New Year as hunt starts for new developer
1 week ago

Contractor services