Research Reveals True Extent of Building Supplies Crisis

It’s no secret that the construction industry has faced a turbulent past eighteen months. A combination of record demand, reduced staffing, and disrupted global supply chains has placed enormous strain on both manufacturers and suppliers, many of whom are still reeling from the pandemic.

Whether you’re a homeowner looking to source some timber for your garden decking, or a developer taking on a large new homes project, you’ll undoubtedly have experienced the effects of this crisis. Due to the unprecedented levels of demand, it’s difficult to quantify the true scale of the crisis. However, the Construction Leadership Council (CLC) has warned that these shortages may persist until at least the end of the year, and the latest ONS data shows an average price increase of nearly 25% year-on-year for building materials.

As an online building supplies retailer, we know all too well the effects this crisis is having on Britain’s £120 billion construction industry. We looked into ONS data to investigate the true extent of the issue, and the effects it’s having on everyone from manufacturers, to developers, to tradespeople, and even DIYers.

The Cost of All Building Work Has Increased Nearly 25%

Rank	Project Type	YoY Increase Oct 2021 (%)
1	Repair & Maintenance	25.9%
2	All Work	23.5%
3	Other New Work	22.8%
4	New Housing	22.4%

Source: ONS

From lockdown restrictions and business shutdowns to the current shortage of HGV drivers, the combination of COVID-19, Brexit, and overseas supplies shortages has left anyone taking on a building project feeling the effects. Higher prices and longer delivery times on materials has caused many projects to continue well beyond their expected completion date, and left buyers in temporary accommodation for months while their new property is being built.

Changes in consumer behaviour and demand throughout the first lockdown are still having far-reaching effects. Protective screens in office and retail spaces for example, caused unprecedented demand for plastics such as polycarbonate sheets, which experienced nearly triple year-on-year demand in Spring and Summer 2020.

Other knock-on effects include a lack of raw materials due to disrupted supply chains and increased demand globally. For example, the global shortage of raw materials such as concrete has caused a 30% drop in the production of concrete roof tiles in Britain when compared to Q3 2020, and an even greater drop of 40% when compared to 2019.

Tradesmen passing each other roof tiles

Top 10 Building Materials Increasing in Price Year-on-Year

Rank	Material	YoY Increase Oct 2021 (%)
1	Imported Sawn or Planed Wood	74%
2	Fabricated Structural Steel	73%
3	Particle Board	65%
4	Concrete Reinforcing Bars (Steel)	62%
5	Imported Plywood	56%
6	Builders’ Woodwork	14%
7	Plastic for Doors and Windows	13%
8	Pre-Cast Concrete Products	12%
9	Non-Aqueous Paint	11%
10	Flexible Pipes and Fittings	8%

These combined crises have had a profound effect on the cost of building supplies, with an average increase of nearly 25%, far outstripping the year-on-year inflation figure of 2.9%. The figures also show far more significant increases among timber supplies, which take up four of the top ten spots. One of the main reasons for this dramatic influx stems from a huge drop in raw material supply overseas. Sweden provides almost half of the structural wood used in the UK, yet its stock levels sit currently at the lowest they’ve been in 20 years.

roof trusses exposed on clear day

UK Timber Supplies Will Not Recover Before 2022

The TTF’s technical and trade manager Nick Boulton stated that although “during the summer shutdown there is usually no significant reliance on Swedish sawmill stocks”, “there will not be sufficient supply to satisfy UK structural wood demand in Q3”. He continues to say that “although prices have risen substantially” from the end of 2019, “they have now exceeded the levels of 2018 and are set to increase further”. With Sweden dropping production by 7% and Finland lower still at a 15% reduction in 2020 vs 2019, the UK construction industry has been told to prepare for the continuation of high timber prices into the future.

The Crisis and the Environment

Climate change is another key factor hindering the timber supply chain. Wildfires and pests are rapidly killing the woodland population, limiting raw materials and increasing supply pressure at a level that suppliers “struggle to keep up with” (TTF). The UK currently imports around 80% of its timber, yet many are calling for government action to further support the country’s forest industry and enhance the supply demand for UK-grown timber. The government has said it was “committed to trebling tree planting rates by the end of this parliament” with forests currently covering around just 13% of total UK land.

The Impact of the Labour Shortage in Construction

Although demand for construction has bounced back considerably, the problem now lies in the lack of skilled tradespeople. According to the ONS, the demand for construction workers is at a 20-year high, but employment in the construction sector has fallen from 2.3m in 2017 to less than 2.1m by the end of 2020. This decrease was made up of a 4% fall in British-born workers and a 42% fall in EU workers.

Due to the increase in time spent at home, the pandemic caused a surge in homeowners looking to improve their properties. This explosion in demand has led to a large increase in waiting times and the cost of labour. Sites such as Mybuilder.com report receiving over 150,000 job requests from families per month, which is almost 50% higher than pre-pandemic in 2019.

The Chartered Institute of Procurement and Supply recently said that “competition for builders and materials has led to the fastest price rises since the late 1990s”. As a result of this, some builders are even demanding reservation fees of up to £2000 six months in advance. According to the BIKBBI (British Institute of Kitchen, Bedroom, and Bathroom Installation), lead times for kitchen, bathroom and wardrobe fittings have also jumped substantially from 4-8 weeks pre-covid to between 8 and 12 weeks.

Tradesman working on roof

The Impact of the Building Supplies Crisis on Different Groups

Self-Builders

The unfortunate combination of shortages and increased supply costs may have a worrying impact on self-build projects, especially those working heavily with timber and steel. Construction may be prolonged, brought to a halt or could even require re-planning due to unaffordability, delays, or time constraints.

Renovators

According to the BEIS Monthly Statistics of Building Materials and Components July report, the cost of materials for repair and maintenance work experienced a huge increase of 26% between August 2020 and August 2021, and grew by over 3% from July to August 2021 alone. With a serious increase in material costs and a potential for additional growth in the future, renovators have been and may continue to be severely affected by the building supplies shortage if yearly increases persist.

DIYers

With builder’s merchants struggling to maintain stock levels and basic supply costs increasing, DIY projects may be delayed, abandoned, or even left unfinished until shortage issues can be amended. Timber, bagged cement and landscaping supplies are popular DIY essentials that are currently stock deprived throughout stores across the country.

SME Builders

SME builders play a key role in the UK housing construction industry; however, many have been left undersupplied with the necessary materials and equipment required to carry out home construction projects. In fact, according to a survey done by the Federation of Master Builders, 9 out of 10 small builders is having to delay projects.

Brian Berry, CEO of the FMB states that some SME builders "are struggling to obtain the materials needed, and in some cases, small builders are actually saying they're concerned about the viability of their business." The decline in support for the SME industry not only affects the property market, but also creates some pretty major issues at a local level too.

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Methodology

Roofing Megastore conducted the research between 4^th October and 5^th November, citing internal sales data, Google keyword data, prominent industry and national sources, and data from the ONS.