Following our market update in May, the industry continues to face build cost inflationary pressures as well as long lead times for key materials. These pressures are having a direct effect on projects with both main contractors and their supply chains finding it challenging to resource sites with materials and, in some cases, key trade labour.

Forecasts predict these issues will last for the rest of this year and push into 2022, with the knock-on effect of the pandemic, Brexit, fuel and energy costs and the shortage of haulage drivers all affecting the market.

The issues are further exacerbated by an increase in construction output across most sectors, which has put an even greater pressure on material supply and demand. Construction output has significantly increased as the industry rebounds from the worst effect of the pandemic, but although output has not yet returned to pre-pandemic levels, the output to Q3 2021, as reported by the ONS, is 45% higher for infrastructure and 26% higher within the private commercial sector.

Not all sectors have seen increases, however. It is reported that the house-building industry has suffered significantly because of the Covid pandemic, with completion of new housing down by circa 11% from 2020.

To read the full Cost Commentary, which details materials and tender price increases, as well as delivery lead times click here:  https://bit.ly/31yKWTE