Material demands: The recovering construction sector puts pressure on supply chains
Recent data indicates the construction sector is growing at its fastest rate for seven years which is great news.
This is translating into more demand for materials and labour but there is a fly in the ointment. The increasing demand comes at a time when there are additional pressures on the supply chain.
COVID-19 restrictions are still hampering the movement of materials, goods, and people around the world. Localised staff shortages when people have to quarantine is adding to the problem.
And then there is the Brexit deal. The impact it is having on the cross-border movement of goods and hiring of staff is becoming a reality.
What this means at a ground level is shortages, increasing prices and delays.
“The issue with steel shortages is well-publicised, but many other materials are affected, such as aggregate, plasterboard, and finishing products,” says Rennie Dalrymple, Managing Director at Concert.
Delays across international supply chains are adding to the problem, and the skills shortage, which was prevalent before the pandemic, is getting worse as the movement of people is still restricted.
This might be pent up demand after limited activity during 2020 because of COVID-19 and, therefore, a short-term problem as restrictions ease.
But the Brexit deal may have longer-term implications, particularly for the supply of labour. Traditionally the peaks of market demand have been plugged by European labour, but as the UK is now outside the EU, the rules are different.
How will this shake out in the next 12 months? There are many variables to consider, and careful project planning will be key for the industry.
“In these uncharted times, you have to take a very early and detailed look at all the critical parts of your supply chain to ensure they’re available within the timeframe needed for the project delivery schedule,” says Rennie.
For an in-depth dive into the construction sector’s materials and labour shortages, what might happen in the next 12 months and how to prepare, listen to this episode of Concert’s Sound Check podcast.
Former property journalist Stacey Meadwell talks to Rennie about what is happening and how developers can navigate these unprecedented market conditions.