Pingdemic intensifying supply chain shortages

Grant Prior 3 years ago
Share

Construction materials leaders are warning that supply chain shortages are being exacerbated by the NHS Covid app ‘pingdemic’.

The latest problems were highlighted in a statement from the  Construction Leadership Council’s Product Availability working group.

It’s update warned that “labour shortages are being exacerbated by the growing number of non-symptomatic drivers, tradespeople, merchant and manufacturing staff required to self-isolate after coming into contact with someone who tested positive for Covid-19. This will further stretch the supply chain.”

The statement penned by John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association gave a thorough run down of current problems and pinch points in the supply chain.

It said: “The basic trends of the last six months remain, with global demand far in excess of supply leading to product shortages, rapid and sustained price inflation, long lead times and uncertainty regarding deliveries.

“It is also clear that the global shipping industry is far from recovered from the disruption caused by the coronavirus pandemic, with congested shipping routes, container cancellations and higher costs still evident.

“The products most affected are those used in housebuilding and domestic repair maintenance and improvement (RMI), including roofing products, timber, insulation, landscaping products, blocks, sealants/PVA, PIR Insulation, kitchen carcassing and products that use plastic, e.g. drainage, some windows and bagged cement.

“Bagged cement is particularly hard hit due to ongoing unprecedented demand but both bagged and bulk cement are on allocation; there are regional variations to this with some areas affected more than others. All UK kilns are operating but it may be a while before stocks return to normal. With high demand continuing, extended delivery times are expected to remain until the end of the year.

“The high level of housing starts has caused a bow wave of demand for plastic pipes for groundworks and drainage. Some manufacturers are currently on allocation, but the expectation is that supply issues will be resolved by the end of Q3.

“Demand for wood and wood products remains very strong and timber supply will continue to tighten into Q3, following the Scandinavian holiday and maintenance season in July, continuing the upward pressure on prices.  There are some indications that the situation may start to improve after this as global demand is beginning to ease.

“Within infrastructure and commercial construction, steel and aluminium are both experiencing significant supply disruption and price inflation.

“There is also concern around the availability of steel cabling management systems which could continue into early 2022 and engineering services business are advised to plan ahead.

“Overall, prices for products and materials have increased by a reported 10-15%, consistent with the Office of National Statistics figure for May of 10.2% overall with 12.8% for those most commonly used in RMI.  Specific products, especially timber, has seen increases of 20-50% for most products and over 100% for OSB and other sheet materials. For the first time we have had reports that some merchants are destocking certain products that are no longer economic.

“Labour, or rather the lack of it, is a rising concern.  All regions report hauliers/HGV/LGV drivers are in short supply and very difficult to recruit, which is contributing to longer delivery times particularly away from major transport routes and urban areas.  We continue to support the Road Haulage Association in its discussions with the Department of Transport to address the shortage.  We are now receiving reports of other vacancies being hard to fill, from relatively unskilled roles, such as yard operatives, to experienced bricklayers.

“These labour shortages are being exacerbated by the growing number of non-symptomatic drivers, tradespeople, merchant and manufacturing staff required to self-isolate after coming into contact with someone who tested positive for Covid-19. This will further stretch the supply chain.

“Looking forward, housebuilders are managing current builds to completion but there are indications that smaller, regional developers may be forced to delay starting work on new sites until they have more certainty around product availability and lead times.

“The demand for home improvement and RMI work remains strong but most work in this area is covered by JCT contracts which have no facility for any flexibility on material costs, leading to fears that we will see business failures arising from unsustainable contracts.  This is now being investigated and may require a change in contractual positions.

“Alongside pricing, stability and accuracy of supply remains the overarching concern and regular, accurate and transparent communication throughout the supply chain to the end client is deemed vital by all.  It is important that all parties recognise the extent of the extraordinary challenges we are currently experiencing and adopt a flexible and collaborative approach to finding solutions.”

Latest news

Ridge buys rival consultant Jubb

Acquisition will see 100 new staff join Ridge
4 hours ago

Enabling works to start £130m Huyton town centre regen

Phase one includes a new council HQ, hotel and 72 flats
5 hours ago

Grainger build to rent pipeline rises to £1.4bn

Rental specialist buys sites in Sheffield and Cardiff to build 600 rental homes
5 hours ago

Kier wins Cambridgeshire County council estate upkeep

Firm will provide building and M&E services to 106 buildings across the county
4 hours ago

Louvres and solar shading specialist files for administration

Hampshire based ALPS lodges court notice after 25 years in business
5 hours ago

Speedy Hire posts a loss in latest results

Hire giant confident of better performance in next six months
5 hours ago

Esh to lead next phase of Riverside Sunderland regeneration

Infrastructure work will allow further development of Sheepfolds area
4 hours ago

Green light for £1.3bn Edinburgh coastal town revamp

First phase of Granton Waterfront scheme will see Cruden Homes create a new community
22 hours ago

Vistry chief operating officer steps down

Earl Sibley exits as his COO role axed for more direct reporting to CEO
1 day ago

House builder Camstead goes into administration

Work stopped on three current sites
2 days ago

Death of piling legend Roger Bullivant

Industry innovator dies after long illness aged 85
1 day ago

ESS Modular went down owing suppliers £7m

Modular specialist owned by ISG owner Cathexis
1 day ago

Builders back farmers in inheritance tax protest

"A rethink is desperately needed" say National Federation of Builders
1 day ago

Willmott Dixon wins £36m leisure centre upgrade

Work to start on historic Westminster 1930s Grade II listed Seymour Centre
1 day ago

Graham wins £100m Cardiff Crossrail phase 1

Work on route to Cardiff Bay to start before end of next year
2 days ago

Laing O’Rourke appoints new European MD

Peter Lyons to take-up new role in February
3 days ago

Profits dip at Stepnell ahead of demerger

Turnover and secured workloads up ahead of restructure
3 days ago

HS2 green bridge deck takes shape

100m-wide wildlife bridge to carry hedgerows and country lane over HS2
2 days ago

1,000-home Wolverhampton city centre scheme in for planning

ECF and council advance City Centre West build to rent scheme
3 days ago

Sisk clinches £54m North London council HQ revamp

Haringey's iconic Grade II listed civic centre to be brought back into use
3 days ago

Ofgem approves £2.5bn Eastern Green Link 1

Work to start next Spring on cable project from Scotland to the north of England
3 days ago

Anglian Water hunts for £1bn delivery partner

Programme delivery partner wil integrate with client team over 15-year plan
3 days ago

Hadden collapse costs supply chain £6.7m

"Highly unlikely" subcontractors will receive anything for their unpaid invoices
3 days ago

Management buyout at M&E specialist

£25m turnover Kimpton in second MBO in its 60-year history
3 days ago

BAM finalises £71m deal to replace first major RAAC school

Work to start on new St Leonards Catholic School in Durham
3 days ago

Scaffolder hit by two tonne weight at nuclear plant

Court hands out £633,000 in fines after Dungeness B decommissioning incident
3 days ago

Go-ahead for 860,000 sq ft East London medical campus

Whitechapel Road scheme of six new and repurposed buildings
3 days ago

Site labour rates hit record high as cost inflation returns

Industry's biggest payroll firm says rates rose nearly 5% last month in London
6 days ago

Morris & Spottiswood acquires part of ISG fit-out division

ISG Cathedral acquisition saves 111 jobs and expands presence across England
7 days ago

New work drives Q3 construction output uplift

Third quarter activity up 0.8% despite slowdown in September
6 days ago

Contractor services