The worth of development supplies is continuous to fall, in line with the newest authorities figures – however there are nonetheless considerations over “vital shortages” in key areas.
Within the newest figures from the Division for Enterprise and Commerce, the material-price index for all development work fell by 1.8 per cent general in September this yr, in contrast with the identical month in 2022.
This adopted a lower of two.3 per cent in August 2023 in contrast with August the earlier yr.
The September decline included a drop of 1.7 per cent for supplies utilized in restore and upkeep, whereas costs for these in new housing rose by 1.2 per cent.
The biggest value will increase within the 12 months to September 2023 have been for steel doorways and home windows (19.0 per cent), screws (14.8 per cent) and ready-mixed concrete (14.4 per cent).
In the meantime, the most important decreases have been in concrete reinforcing bars (-29.0 per cent), fabricated structural metal (-28.4 per cent) and imported sawn or planed wooden (-16.7 per cent).
In the identical interval, brick deliveries fell by 32.8 per cent, and deliveries of concrete blocks by 19.5 per cent.
Aldermore Financial institution head of specialist tools Chris Smith mentioned the development trade was “persevering with to bear the brunt of financial challenges” and that regardless of one other month of declining materials costs, “we face vital shortages in key supplies like bricks and concrete blocks”.
“These shortages are inflicting mission delays and contributing to a decline in trade output and the pursuit of latest alternatives,” added Smith. “Some bigger tasks, corresponding to HS2, are additionally utilizing up out there supplies, and moreover new equipment retailers are experiencing a slowdown in equipment gross sales because the market begins to gradual off the again of fabric availability.”
He added that it was “exhausting to foretell” whether or not the present decline in costs would proceed, given present market volatility.
Smith pointed to inflation, the rising price of dwelling, and elevated rates of interest as components more likely to have an effect on materials demand, in addition to labour shortages and rising wages.
“But, the trade as an entire is feeling optimistic, regardless of pockets of decline in sure sectors,” he mentioned. “The trade performs a significant function to the UK’s economic system, so it’s vital development companies could be empowered at the moment to optimise their monetary assets and develop sensibly in order that they’ll proceed to ship tasks regardless of the challenges in opposition to them.”