TG Escapes Blog
Construction faces the perfect storm and costs are rising
The construction industry is facing 'the perfect storm'. The impact of Covid has been to delay many construction projects which are now coming back into play. Brexit has caused disruption in the supply chain and these two factors together are creating an increase in prices of materials and labour.
We have reviewed market intelligence from across the industry.
The availability of materials is presently a significant key risk across the sector. The impacts from both the pandemic and Brexit has resulted in the uncertain supply of goods and materials. This trend has continued from 2020 into the first quarter of 2021, where the lead time for materials has further increased by an average of 1.5 weeks across all trades when compared to the previous quarter.
Current forecasts suggest the lead time for materials and labour will increase by an average of 2 weeks by Q1 2022. Over the course of the year, M&E will be particularly impacted by increased lead times, with multiple industry reports forecasting a 6 week increase by Q1 2022 in the south of the UK. In addition, lead times for Carpentry and Joinery, Brickwork, Steelwork and Groundwork are forecasted to increase by an additional 3 weeks by Q1 2022.
Derived from the easing of Covid-19 restrictions, the anticipated surge in construction activity over the next year may lead to the rise of building costs. Building costs in the south of the UK are forecast to further increase by an average of 6% throughout 2021 across all construction trades. The rapidly changing conditions within the marketplace are set to continue throughout the year and will represent a risk to all construction projects. As timber is integral to our solution the currently projected impact of timber price fluctuations could see a 15% increase in costs to our business.
We are encouraging all our customers with project proposals to bear this in mind. Our timelines are likely to be affected by these issues as could our costs.
TG Escapes has a robust supply chain, pro-active procurement team and multiple supporting industry partners. We shall endeavour to do all we can to mitigate any cost increase to our projects, however, we like all in the industry are concerned about future cost rises. Our ethos is to ensure, where possible, cost surety to our clients and we will continue to work towards delivering projects on time and within budget.
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