TTA ALERTS ITS MEMBERS TO INCREASING COSTS AND MATERIAL SHORTAGE ISSUES
Brexit and escalating post-lockdown demand, along with a combination of other factors, are now causing significant materials supply and price issues, affecting all in our sector.
The main impact is on manufacturers, who are having to pass on price increases, and these in turn will inflate retail and trade prices. Although hopefully temporary, this situation is expected to remain until at least Q4 of this year.
The escalating prices are on top of the shortages being seen across the whole construction industry – from paint to timber to cement and polymers.
The situation impacts on the whole industry including retailers and fixers. TTA is therefore proactive in canvassing its members on how they are being affected, flagging up future supply chain problems and lobbying for support. It has been unfortunate that a number of issues, including bad weather and fires in certain supply areas and delays caused by the Suez Canal blockage are continuing to impact on supply of construction products, to add to an already tight situation.
TTA members reported tile shortages in April, due to factories trying to catch up after Covid shutdowns, as well as heavy demand in certain product areas, such as 20mm porcelain tiles. Manufacturer members have reported price increases affecting all raw materials, as well as big increases in shipping costs. There is particular concern around supply and prices of plastics and polymer, which are up 70% in some cases. There was also a concern that polymer supplies might become increasingly tight in the coming months. This would have a big impact on prices and availability of packaging materials and adhesives for the tiling industry.
Distribution is flagged up as a particular area of concern, with delays caused by pallet shortages, as well as the ongoing effect of the Suez disruption, and very large increases in shipping costs from India and China – up 8-fold compared to the same period last year in some cases.
These factors are already having an impact on the recovery of the construction sector, where Build UK has flagged up a slight decline in activity during April. Also the Royal Institute of Chartered Surveyors found that up to 57% of its members believed that materials shortages were the main obstacle to a stronger recovery.
TTA has raised the concerns expressed by members directly with the Construction Leadership Council, which includes representation from Government. The general view is that supply issues are likely to continue for the rest of the year and all sectors – manufacturers, contractors and merchants – are reporting a similar story, escalating demand, but problems on the supply side, caused either by materials or transport shortage.
The CLC has a Product Availability Working Group, of which TTA is a member, which has subsequently issued an updated statement on the availability of construction products. This confirms that ‘in general, products are available but lead times have lengthened’. The worst affected products continue to be timber, roof tiles and roofing membranes.
The statement continues: “Raw material shortages, stemming from global demand and other external factors such as factory closures outside the UK, continue to constrain production of PE and PP plastics, PIR insulation, paints, adhesives and other coatings, and also packaging for other product groups. Pent up demand for landscaping products over the spring and summer may place an additional burden on supplies, but demand will continue to be met with longer lead times where needed.”