Continuing price fluctuations, materials availability and labour shortages were all highlighted as some of the top concerns for suppliers and the construction industry. Cost pressures are already being felt across the supply chain, from stock purchasing and shipping to fuel and wages.
Stefano Lebban, director of Herts Tool Company, said: “As construction workers reach retirement age, fewer people are entering the industry to replace them. The growing difficulty of sourcing labour and attracting younger talent is a pressing issue and may impact supply and demand in 2022. Businesses will need to increase their spending on recruitment as well as the salaries of existing staff to secure skills that are in short supply.”
The report suggests the shortage of cement, copper and steel will continue to be a prime concern for the industry, with inflation and price fluctuations making it difficult to fulfil customer orders. While some believe that material prices have reached their peak, there are also cost concerns arising from current fuel hikes. These are predicted to hit firms that transport machinery to site for customers, with some even struggling to access vital machinery. To exacerbate the situation, international shipping, especially sea freight, is now up to 10 times more expensive in Asia.
While many people are looking to purchase materials for home improvement and renovation projects, the materials shortage is also putting pressure on a number of infrastructure projects.
Des Duddy of ProTrade, said: “It has created a big demand for labour and raw material – which cannot be met with the current material supply chain issues. So it’s likely to inflate the prices of raw materials even more than the 20% average experienced during 2021, as projects all over the world contest and haggle over products. This is creating an attitude that no price is too high.”
Following a push for a zero-carbon built environment at COP26, the campaign to reduce the carbon footprint in the construction sector has intensified. The industry is urged to not just consider climate change in its practices, but also work on more energy-efficient buildings. BN Thermic saw an almost overnight spike in demand for electric industrial space heating systems after the conference. However, companies have expressed concerns about the growing pressure to become more sustainable and the impact it will have on firms.
Samuel Hunt from Materials Market, said: “It puts pressure on the already stretched pandemic resources of construction companies to invest in a greener, more sustainable future. Combined with all of the other problems facing the industry, this will prove a challenge for many businesses across the UK.”
According to the poll of builders’ merchants, investment in recruitment and digital capabilities will be needed to tackle mounting challenges in the year ahead. To reflect changing customer habits, more merchants have begun investing in their own e-commerce stores.
Cass Heaphy, digital director at Paving Direct, said: “All businesses need to fully adopt digital strategies that allow them to provide consumers with the products and services they need remotely and in a joined-up omnichannel way.”
Andy Scothern, eCommonSense founder at ECI, added: “While there are always factors outside a business’ control, the past two years have clearly been challenging. However, there are plenty of examples of forward-thinking builders’ merchants who’ve used e-commerce to tap into high demand for materials from both the trade and public. Using digital tools to develop robust back-office processes is also important since it helps businesses to reduce costs and uncertainty.”