The CLC releases statement on product availability and challenges for 2022

A statement was released by the Construction Leadership Council’s Product Availability Group. The group is co-chaired by John Newcomb, CEO of the Builders Merchants Federation, and Peter Caplehorn, CEO of the Construction Products Association. The statement outlines the current situation in the construction industry regarding the accessibility and availability of products as we enter 2022.

There is an improvement in the supply situation across all regions in the UK, which has taken some pressure off prices.  However, this is largely due to a seasonal decline in activity.  While much has been done to ameliorate the issues seen earlier in the year, there remain challenges in relation to UK production capacity for some products, and in relation to the operation of the logistics and shipping sectors.

There is an expected return of pressure on supply chains to deliver products as construction activity remains strong next year, with longer lead times and further price increases anticipated.  Furthermore, despite precautions being taken by merchants and manufacturers, the rapid increase in cases of Omicron is likely to impact production and operations into the New Year.

The uncertainty around delivery and price has a disproportionate impact on SME builders working mainly on domestic repair, maintenance, and improvement projects, where clients want price certainty before the project begins.  It is, therefore, essential to maintain open lines of communication throughout the supply chain. All sectors are encouraged to continue to work closely and collaboratively to manage challenges and plan future work.

Looking more closely at current and future challenges:

• Bricks and blocks remain in short supply for the reasons outlined in the last statement (November 29). Demand is expected to be strong well into 2022, so imports may be necessary to make up for shortfall in UK production until new production lines come on stream in 2023/24.

 

• While there are few issues with cement stocks at the moment, merchants are being asked to not deplete stocks in their yards in preparation for the annual winter round of maintenance shut-downs. Manufacturers have committed to produce as much as they physically can, but supplies will typically decrease during this time. Also, as flagged in the November statement, manufacturers have raised concerns that rising energy costs will likely lead to price inflation.

 

• Demand for roof tiles remains high, with lead times averaging 24 weeks.

 

• Supplies of many timber products have returned to more normal levels and prices have fallen from highs, particularly for structural timber, however tongue & groove remains in short supply. Looking ahead, continuing congestion both here and at Scandinavian ports may lead to reduced supplies and higher prices in Q1 2022.

 

• Pressures on global shipping, including delays and volatile prices, look set to continue well into 2022. In addition to ongoing disruption stemming from China’s sustained ‘zero’ policy with regard to Covid-19 outbreaks, performance issues at Felixstowe have led some major shipping lines to divert vessels headed there from Asia to other, smaller ports in the UK.

 

• The logistics sector reports recent progress with the government providing additional training opportunities and grants to get more HGV drivers on the roads. With driver wage increases and flexibility in working making the industry more attractive, the CLC are hopeful that driver shortages will have less impact on the sector in 2022.