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NEWS

Building firms facing financial pressure due to shortage of supplies and rising costs

News

28 May 2021: During lockdown many saved and embarked on DIY and home improvement projects. This unprecedented demand is now leading to a shortage of cement, some electrical components, timber, steel and paints.

This shortage of building materials could lead many building firms to delay projects, others may be forced to close, some indefinitely, others permanently. It is reported that small, local builders are being hit hardest by material shortages and price rises.

Recovery out of the pandemic is proving challenging with price rises as supplies dry up. Shipping costs to the UK since Brexit has also lead to an increase in costs. Raw material supplies are mainly imported and lead times as well as commodity prices are increasing.

Global warming is another factor that is affecting supply with a warmer winter, slowing timber production in Europe and a colder winter in places like Texas affecting the production of chemicals, plastics and polymer.

The pressure is on the small to medium size firms in ensuring the right prices are charged for work. If the margins are not correctly priced, many builders will find themselves in financial difficulty and unable to pay suppliers and wages.

If you or your client have concerns and are being affected by the above issues, consequently feeling the financial pressures, please feel free to contact one of our management team.