Latest construction product availability statement
Latest statement from 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.
There has been little change in respect of overall product supply since the last report in April, although the conflict in Ukraine is likely to affect some timber supplies later in the year. There is a good supply of most products and materials but, as previously reported, ongoing challenges continue to affect bricks, aircrete blocks, concrete products, PIR insulation products and gas boilers all of which are on long lead times.
Most wood products are fully stocked but Birch plywood will become increasingly scarce as summer progresses as outside of Russia there is only limited production from Europe. It is said if the UK market is offered Birch Plywood for later in the year from the Far East, it will be based on Russian Birch logs and will be illegal to import. Siberian larch cladding is also expected to disappear from the market, although the availability group said there were plenty of alternative cladding sources.
There have been reports of initial signs of a slowing market with recently published data pointing to a slowdown in starts on site during the three months to April 2022. It suggests that inflationary pressures are starting to influence client decisions in some sectors, continuing the trend seen with softening retail sales over the last few months.
Most regions are still reporting strong demand on the trade side. SME contractors, however, are concerned that local authorities may delay regeneration projects until they can achieve more price certainty through the procurement process.
Price inflation remains a critical issue with the latest data published by BEIS showing that annual material price inflation increased to over 24% in March for a basket of materials. With further restrictions on Russian gas and oil imports across Europe, it is expected that energy price movements will continue to be unpredictable. There have also been reports of impacts on the availability of products caused by the outbreak of COVID in China and consequent restrictions imposed, which is affecting manufacturing and shipping from Shanghai.
The conflict in Ukraine continues to affect certain product areas. The Product Availability working group are undertaking a horizon scanning exercise to determine the likely event of disruption particularly in relation to clay, ceramics, electrical products, and raw materials for steel and other production, as well as impact on energy costs.