Price inflation has stabilized across the industry, according to the Construction Leadership Council’s (CLC) product availability group.
However, smaller companies in particular should expect to feel the pressure for some time, he added.
In its latest statement, the body said most material availability has now returned to pre-Covid levels, with only semiconductors causing concern during September.
The statement, jointly written by the chief executive of the Builders Merchants Federation (BMF), John Newcomb, and the chief executive of the Building Products Association, Peter Caplehorn, said price inflation had stabilised, with the ‘increase in the price of products now limited to 1-2% compared to more than 5. percent a year ago.
The price of wood and “some plastic and energy products” is now falling, they said.
“This is largely due to stagnant demand, particularly the continued fall in house building activity over the past six months. Bad weather and strikes in July and the holiday period in August also contributed to a slowdown in activity during the summer.”
The fall in activity, highlighted earlier this month by Glenigan and the Office for National Statistics, was confirmed by other BMF data this week.
The latest Builders Merchant Construction Index shows that merchant value sales fell 0.4 percent in July compared to the same month in 2022 as volumes fell 7.9 percent.
Prices rose 8.1% year-on-year, showing how much inflation continues to haunt the industry.
In month-on-month terms, prices rose by 2.2. percent, with a sales volume reduced by 7.5 percent.
Despite the reduction in inflation, Newcomb and Caplehorn warned: “While there are signs of improvement in some regions in September, key economic factors – inflation, rising cost of living and interest rates higher – will continue to be a major challenge for construction output. for the rest of the year.”
They added that trading behavior was “likely to tighten” and put more pressure on lower-tier contractors and SMEs, reducing cash flow capacity and making liquidity a “bigger challenge”.
