Parm Bhangal, Managing Director, Bhangals Construction Consultants, urged patience and understanding as the industry tackles building material shortage and price inflation crisis
The persistent supply crisis has resulted in steadily rising costs and inevitable delays in the construction industry.
As developers experience shortages of key materials such as bricks, bagged cement, and tiles, vendors can dramatically increase prices.
Anyone who builds apartments depends on steel and concrete, which have also seen sharp price increases and supply constraints.
Lack of available materials coupled with long delivery times have inflated construction costs, undoubtedly pushing up the price of new homes and all construction projects.
Cost of construction work up 25%
According to new figures from the Ministry of Business, Energy and Industrial Strategy, the shortage of supply has seen the cost of construction work increase by nearly 25% in the past 12 months, with the cost of materials rising. regularly from month to month. during this period.
Unfortunately, the crisis shows no signs of abating. On the contrary, the shortage of supply continues to worsen, rapidly and globally, for certain elements, in particular insulation, wood and steel. We continue to see price increases for all raw materials.
For construction consultants, it is very difficult to choose projects because there is no way to guarantee that the cost remains relevant for a significant period of time.
Before Covid, we could keep a viable cost plan open for at least three months – and up to six months – but now that costs are rising daily, that’s nearly impossible. In four weeks or less, your initial estimates become stale and irrelevant.
Experience knows that the vast majority of large construction projects last much longer than a few weeks. Therefore, construction contractors are forced to increase the initial quotes, as well as update the pricing structures as they arise, to ensure that they do not suffer a loss.
Quality construction at a very inflated price
This inevitable movement means that the end user also feels the pinch. Unfortunately, good quality construction is currently offered at a very inflated price.
Some developers have become reluctant to launch new projects due to the cost uncertainties surrounding the investment, but for homeowners, who want to make cosmetic changes to their properties or begin full renovations after foreclosure, continue to go for the front.
Those who want to make a profit are considerably put off. But for those determined to make smaller home renovations, the Covid restrictions have made them seriously consider changes and – for many – have given them unexpected cash to fund them.
Large numbers of people, who could work from home during closures but didn’t have the option to go out and spend the money, now see the perfect time to renovate, renovate and build new – whatever. or the price.
With money burning a hole in their pocket and additional uncertainty over the government’s future plan to tackle Covid, it’s no wonder homeowners want to improve their living space.
There is so much demand in the industry right now. Despite the rising prices, business is still available, people keep moving forward. Demand continues to greatly exceed supply.
If high prices started to sway people who were holding back, things might calm down a bit and the downturn in activity might push prices down. But in the meantime, there’s not much you can do to fix the problem, other than increasing the prices to cover the costs and keep the information relevant.
Shortage of truck drivers
Many of the challenges we face as construction professionals are due to the shortage of truck drivers, which has caused problems across all industries. There are around 70,000 fewer truck drivers today than the numbers before the pandemic. We have seen a massive – extremely damaging – exodus of drivers from the UK during the Covid crisis.
The government’s decision to introduce temporary visas for 5,000 truck drivers to work in the UK in the last quarter of this year was certainly a step in the right direction.
But, after a difficult period for all industries, during which Covid and Brexit caused unprecedented disruption to construction works and projects, we need the continued support of the government to ensure a future with work plans. uninterrupted, faster delivery times and more affordable materials.
Introducing incentives for heavy truck drivers to return to the UK and investing in training and testing new recruits would help safeguard development projects so that they can continue effectively.
The import price and the change in laws surrounding trade with Europe mean that the import price has also increased significantly.
An imported container is now four times more expensive than the cost before Covid. If you import supplies by container, your costs have quadrupled. And there could be more to come, with new border control regulations expected early in the new year.
The Covid pandemic must also bear responsibility for closing factories and stopping manufacturing. The blockages have forced many manufacturers to suspend their production lines, causing delays in making new materials available.
Right now in our industry the risk is high and unpredictable.
Be open and transparent with clients
We must continue to be open and transparent with our clients, so that they are informed and alerted to any potential changes that could affect their project in terms of cost or appearance.
If you don’t want to inflate prices to protect yourself against changing material costs, be sure to cover the risk and put the right qualifications in your customer agreements.
If there is a price increase over the next four weeks, they should be aware that the costs are subject to change, depending on the market. Good communication is the key.
Customers should be cautioned that choosing the default manufacturer with the cheapest quote is not the way to go in this case. Construction contractors should stress the importance of choice, quality of skill and good customer service over price.
It is essential to keep the client at the heart of your decision making on his project. It avoids any unnecessary problems and escalation later if you keep them involved in whatever is going on, but more than that it strengthens your working relationship and ultimately improves the end result. Two heads are better than one.
Bhangals Construction Consultants
Phone. : 01604 871806
Twitter link: https://twitter.com/Bhangals
LinkedIn link: https://www.linkedin.com/company/bhangals-ltd/