Product Availability Update

June 23, 2023

John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association, co-chairs of the Construction Leadership Council’s Product Availability working group give update.

Further to last month’s statement, once again there is good availability of most building materials across the UK.  While there are some reports that plasterboard, roof tiles and rock mineral insulation are on allocation, these appear to be either localised issues or restricted to a limited number of manufacturers, so does not seem to be creating significant problems more broadly.  In addition, no major availability issues have been cited around either electrical components or timber, which in previous months were proving problematic.

At a macro level, construction activity is increasing, with commercial and civil engineering work the key drivers.  There are also early signs that activity in domestic RMI work and the associated retail trade have started to pick up with the return of warmer weather.

The end of the Help to Buy scheme and continued uncertainty over interest rates, and its impact on mortgage availability, is constraining housebuilding.  The consensus for sector forecasts is that year on year demand will be down this year before picking up in 2024. In advance of this, some housebuilders are taking the opportunity to reset supply chains, moving away from single source agreements to bring in additional supply sources to provide greater product availability when activity increases.

Looking ahead, inflation running at 8-9% is likely to be a driver of higher costs over the short and medium term –  particularly concentrated on energy intensive products. Although many larger manufacturers have begun hedging their energy contracts into 2024, the costs to those products will likely remain elevated compared to the levels seen before the outbreak of war in Ukraine.

We are also monitoring the impact of drought conditions affecting key logistic routes and shipping volumes from Asia and China and through the Panama Canal – though no firm data is yet available.

We are also aware that, with the availability and cost of financing options increasingly limited, many Tier 4 and SME companies have very little capacity in terms of cash flow making liquidity a greater challenge.  With the number of administrations in the construction sector at a very high level, this is another area we will continue to monitor.

« Read more news

Read PlumbHeat

Not a member? Enter your details below for a sneak peek of our latest issue of our quarterly magazine.
Magazine sign up form

Cover of theSpring 2024 issue
Cover of theWinter 2023 issue
Cover of theAutumn 2023 issue