Construction materials price increases - Thoughts on best practices within a volatile market
Since the start of the pandemic, material prices in construction have risen sharply, and now, factors such as the war in Ukraine and inflation have only exasperated things.
Timber, steel, concrete, and tiles for roofing have seen the biggest increases. However, other materials have seen significant increases, too, such as plastics, quarry, and other metals such as aluminium, lead, cast iron, and copper. For an extensive list, please see the material price tracker and price movement list below.
Material Price Tracker, by Home Building, via website: https://www.homebuilding.co.uk/news/construction-materials-shortage
Construction Materials: Price Movement Chart from 2021 Q1 to Q3, by ONS, Oxford Economics, BCIS, via website: https://www.rics.org/uk/news-insight/latest-news/news-opinion/construction-materials-cost-increases-reach-40-year-high/
Almost every sector in the construction industry has been affected by these sharp increases. As a result, many projects on hold throughout the pandemic are now seeing values skyrocketing and clients unable to budget for the significant change.
While not the end-all solution – unfortunately, in this case, there doesn’t seem to be one – one way to alleviate pressures from both the contractor and client’s side, and one that we have seen prove beneficial to both parties is collaboration. That means open-book pricing, transparency and honesty in sharing prices given by suppliers and contractors, passing-down any benefits and cost reductions to the client, and collaborative value engineering, to name a few.
It has also been the cause of concern that some suppliers have been unable to hold to a quote for any longer than 24 hours due to market volatility. From a client perspective, this is something to consider when preparing a project budget, in which the value of endeavouring for an adequate contingency has never been so important. It is a daunting position for contractors and client’s to be in, and it must be through a mutual understanding of risks on both sides and a collaborative way of working which enable a project to move forward.
If you have questions, contact Timothy Lee-Davis, Technical Support Manager, on 07852 629 399 or Sam Whiting, Technical Support Officer, on 07507 973 301, who are from the London and South East team.
