If you like to stay up to date with the construction and material supply industry then you may have seen the latest updates from BBC News and the Timber Trade Federation. This news does not come as a shock to QTD Ltd, since our company and many others have been hit by raw material shortages and price increases over the last year and a half as a result of the Covid-19 Pandemic.
Ultimately, BBC News states that building materials throughout the UK are running short, putting supply and build companies under immense pressure. The Construction Leadership Council has warned that cement, timber, steel, paints and some electrical components are in short supply. This is due to unprecedented levels of demands which have been felt since the start of the pandemic in early 2020.
This is a difficult time for suppliers across the country, from small to large scale businesses. Brian Berry perfectly emulates this issue “we can't build our way to recovery from the pandemic if we don’t have the materials” and this is the dilemma that many brands are facing.
The BBC also explains that supply problems have stemmed from several factors, construction projects surged since lockdown begun easing, skyrocketing the demand for already scarce material. As well as this, a warmer winter affected timber production in Scandinavia, and the cold winter weather in Texas had a knock-on effect on the production of plastics and chemicals. Shipping costs have also sharply increased due to a shortage of containers from Covid-19 related issues. As an example, the cost of shipping a 40ft container from Asia to Northern Europe increased from around £1,061 in summer 2020 to more than £5,837 in May 2021.
With the global demand for raw materials rapidly increasing, and the reliance on imports to the UK, lead times are as a result, lengthening. The Office for National Statistics has projected a rise of 7-8% in the industry, with timber expected to be more than doubling, and by more than 30% for cement. As Chris Husband at Bayram Timber states, the sheer volume of timber that is being demanded cannot be met at a usual pace by raw material suppliers. Having to wait in line for material to become available, next to other industry players has had a huge inflationary effect so far on raw material prices and lead times.
This is a challenging time in terms of supplies, and something that we have never experienced before. QTD Ltd is doing our best to acquire raw materials in advance, reserving slots for materials when they become available and investing in in-house machinery to decrease lead times and the need for price increases to satisfy our customer's project needs. With regular updates and research into the industry, we aim to consistently update our current and future customers on the state of the industry and what to expect. To allow customers to plan ahead, and secure materials when they become available. Reducing expected lead times.
We expect this situation to settle in the coming months and year, however, this is an unprecedented time. We are working closely with our suppliers to ensure that we can obtain the best quality materials for the best price for our customers, adhering as closely as possible to project deadlines. We have shipments of material arriving in June, July and October, with material already reserved from our suppliers. We are optimistic that we are still able to provide a high quality, professional and bespoke service to our customers.
Infographic Explained
March 2020
The UK entered its first nationwide lockdown. Nearly all trade ceased, including within the construction industry. Millions furloughed or out of work and at the peak of the pandemic the construction industry had 41% of their staff on furlough.
March-July 2020
The beautiful UK weather saw people spending more time in their gardens and set about renovating their homes and living spaces. Demand for raw materials soared. Many projects were still on hold due to restrictions regarding workmen on-site, and adhering to social distancing measures that were not suitable for site work.
May 2020
Lockdown eased for the first time in the UK, construction workers were able to go back to work. Workers set to catch up on delayed projects and demand was beginning to be met.
October 2020
A second lockdown was imposed throughout the UK. Creating project delays and uncertainty around raw material availability.
October-December 2020
The tiered approach to local lockdowns and restrictions allowed the construction industry to fulfil work where possible whilst adhering to local guidelines and restrictions.
January 2021
A third national lockdown was announced, with restrictions closely reflecting those within the first national lockdown. The construction industry was still able to operate, however, time was spent catching up with delayed projects as a result of previous lockdowns and restrictions.
March 2021
A phased plan was put in place to reintroduce the UK to normal life. The construction industry was able to work and begin to fulfil order capacity.
However, a surge in demand throughout the year saw a lack of material availability ranging from timber to cement.
March 2021
The Suez Canal blockage subsequently caused delays to material arriving into the UK from around the world. As a result of these delays, there was a worldwide container shortage, causing even more delays to material returning and being shipped across the world. This further compounded an already extreme container shortage due to containers not being in circulation meaning the USA (for example) were shipping back empty containers into Europe and Asia to get the supply chain moving.
March-May 2021
Throughout the construction industry, as a result of a surge in demand, suppliers began to increase their prices, making material harder to obtain and secure. Due to the raw material shortages and logs not being harvested in the usual volumes, timber mills have started to increase their prices due to reduced volumes going into the marketplace.
Summer 2021
The prospect of rationing materials was considered due to the increasing demand for materials with the construction industry trying to fulfil delayed projects and taking on additional work. Leading to price increases and consequential delays.
As always, if you are looking for advice on your project, our Sales team are always happy to help. Get in touch today on 0118 373 2211 or email sales@qtdgroup.com with any queries you may have.