The price of building materials continues to fall, according to the latest government figures, but there are still concerns about “critical shortages” in key areas.
According to the latest figures from the Department of Business and Trade, the materials price index for all construction works fell by 1.8% overall in September this year, compared to the same month in 2022.
This followed a 2.3% decline in August 2023 compared to August a year earlier.
September’s decline included a 1.7% drop for materials used in repair and maintenance, while prices for new homes rose 1.2%.
The biggest price increases in the 12 months to September 2023 were for metal doors and windows (19.0 per cent), screws (14.8 per cent) and ready-mixed concrete (14.4 per cent) .
Meanwhile, the biggest declines were in concrete rebar (-29.0%), fabricated structural steel (-28.4%) and imported sawn or planed wood (-16.7%).
In the same period, brick deliveries fell by 32.8% and concrete block deliveries by 19.5%.
Aldermore Bank’s head of specialist teams, Chris Smith, said the construction industry “continues to bear the brunt of the economic challenges” and that, despite another month of material price declines, “we face a critical shortages of key materials such as bricks and concrete blocks.”
“This shortage is causing project delays and contributing to a decline in industry output and the search for new opportunities,” Smith added. “Some larger projects, such as HS2, are also using available materials and, in addition, new machinery retailers are experiencing a slowdown in machinery sales as the market begins to slow material availability.”
He added that it was “difficult to predict” whether the current price decline would continue, given current market volatility.
Smith pointed to inflation, rising cost of living and rising interest rates as factors that may impact demand for materials, as well as labor shortages and increase in wages.
“However, the industry as a whole feels positive, despite pockets of decline in certain sectors,” he said. “The industry plays a vital role for the UK economy, so it is important that construction companies can be empowered at this time to optimize their financial resources and grow sensibly so they can continue to deliver projects despite the challenges they face.”
