Firms need to fairly share supplies as building boss warns housebuilding likely to be hit first

The Construction Leadership Council is asking the industry to take a fair approach to materials distribution in the wake of worsening shortages – suggesting rationing to make sure smaller firms get their fair share of dwindling supplies.

In its latest product availability update, the group warned materials shortages had intensified in the past two months.

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Source: Shutterstock

The CLC has said the shortages have got worse in the past two months

The pan government and industry leadership body, known as the CLC, said: “Back in March we warned that product availability would worsen before it improved. This is proving to be the case; projections indicate that strong demand will continue over the next six months.

“This mirrors similar projections worldwide, as major economies such as China, the US and the EU surge following lockdowns.”

It said smaller firms were being particularly hit and added: “The surge in demand means some SME builders are not able to purchase essential materials, like timber, cement and roof tiles, as readily off the shelves. This not only impacts their ability to complete projects but also the cash flow of their business.”

It said that given the impact on smaller firms “wherever possible the industry must work collaboratively to manage this unprecedented situation”.

The CLC added: “Any allocation systems should be as transparent as possible so all customers can be seen to be treated fairly. Customers should not over-order unnecessarily, while manufacturers should not promise delivery dates that cannot be achieved, only to cancel at short notice.

“Where relevant, the production for major projects – which is typically scheduled well in advance – should not be seen to adversely affect volumes available for smaller, regular customers.”

The chief executive of construction giant Mace, Mark Reynolds, who sits on the CLC, said bigger contractors had yet to be hit by the impact. He said: “I do think the biggest challenge that we face is how the materials shortage, which is particularly affecting RMI at this stage, is going to begin to affect housebuilders probably first, and then major construction.

“At Mace we can't see the impact at the moment. The information that we share when looking at procurement isn't showing any significant issue around material supplies affecting us, apart from anything that has silicon chips.

“We have received some odd things around, believe it or not TV monitors and things like that not being available or being delayed because of the silicon chip shortage. But that's a new thing that's only coming about in the last few weeks.”

The CLC said most of the shortages of products and raw materials impacting the market have been driven by both global and domestic supply and demand factors.

It said while previously reported issues relating to timber, steel, pitched roofing, plastics and paints were continuing, there were growing concerns around electronic components and bagged cement.

It also said that in addition to availability and resulting longer lead times, there was an impact on prices, with the Office for National Statistics projecting a rise of 7-8% in prices, with increases for certain materials, such as timber, expected to more than double during the year.

The CLC added that new rules on hauliers have exacerbated the shortage of drivers in the UK, adding to delays and lead times in both construction and other sectors as well.

The warning from the CLC comes a day after roofing industry bodies warned of supplies of timber battens "running out" due to huge global demand.

Last month the RICS warned the current shortage of materials was the biggest threat to construction's continued recovery from last year's lockdown.