Material shortages and price increases

June 24, 2021

SNIPEF Members are experiencing increased lead times, price increases and using additional time and money seeking alternative products


Global demand for products within the plumbing and heating sector and construction as a whole continues to outstrip supply and for our membership, this is resulting in increased lead times, price increases and additional time and money seeking alternative products. It is also making it very difficult for businesses to price work as some suppliers are only holding quotes for 14 days or less.

The position has arisen due to several factors. Some manufacturers stopped production during the height of the pandemic and so had not built up stocks to deal with the increased demand from the sector when it started up again. The pandemic has hit key ports resulting in containers being held up and redirected to other ports. Earlier this month there was an outbreak of Covid-19 at Yantian Port in Eastern Shenzhen. As vessels started to back up in the South China Sea, other routes were sought, one of which was in Western Shenzhen. There has now been an outbreak of Covid-19 there too resulting in further issues. The pandemic looks as though it will have implications throughout the world for some time to come and businesses will need to be more resilient than ever.

While Brexit has caused problems in respect of paperwork and has added to delays and costs, the impact has been significant in the road haulage sector. Typically, this sector comprises a large number of Eastern European drivers and they for a variety of Brexit reasons have left the UK. This together with the inability of many to sit drivers tests during the lockdown means that there is a significant shortage of drivers and this is exacerbating the product issues Members are experiencing and adding to costs.

We are hearing that tradespeople are now more open to customers sourcing products to be installed and while this may save the business time they will need to be vigilant in ensuring that the products meet the required standards and that by installing them, they are compliant. We could start to see an increase in sub-standard products being sourced to replace products that are unavailable through shortages, possibly resulting in product failures which could then impact the insurance market.

So what can you do and what is SNIPEF doing for its Members?

Firstly, moving forward communication is key. You need to communicate with your supplier and your customer on an ongoing basis so that your supplier can order the materials you need well in advance and that your customer is aware of the current global situation and understands that this may lead to delays, product changes and very likely price increases.

SNIPEF represents the CICV Forum on the Construction Leadership Council (CLC) Product Availability Group and is now in a position to hear first-hand from leading manufacturers and merchants where the problems lie and what issues lie ahead.

We are also working with the CICV Forum to produce a webinar for Members on how you might protect yourself in contracts for product delays and price fluctuations. More information will be provided within the next few weeks about this including how you can register for the event.

As well as reporting issues our Members are experiencing to the CLC Group which feeds into the UK Government we are also working with the Scottish Government on how they might protect contractors by building flexibility into public sector contracts on pricing by issuing guidance to procurers.

In Northern Ireland, SNIPEF as part of Actuate UK Ltd and the Northern Ireland Construction Group has raised the matter with the recently formed Procurement Board who have asked the Central Procurement Board (CPD) to issue guidance to the Centres of Procurement Excellence (CoPEs) on how to deal with this including the granting of concessions.

We will continue to keep Members updated as information arises but we ask Members to contact us with any issues they are facing so that we can raise matters with the various authorities and where possible seek assistance. Please call us on 0131 556 0600 or email us at info@snipef.org

While there is no doubt that there are many challenges ahead as we come out of the other side of the pandemic we can be positive that there is work there, our sector is busy and the future is positive – it is the here and now that will test our resilience.

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