More than half of small building firms say that rising material prices are squeezing their margins and the same percentage have had to pass these price increases onto consumers, according to the latest research by the Federation of Master Builders (FMB).
Small and medium-sized (SME) building firms were asked which materials are in shortest supply and have the longest wait times. The average results were as follows (in order of longest to shortest wait times):
Bricks were in shortest supply with the longest reported wait time being more than one year;
Roof tiles were second with the longest reported wait time being up to six months;
There other reported shortages, by rank, were Insulation, Slate, Windows, Blocks, Porcelain products, Plasterboard, Timber, and Boilers.
SME building firms were also asked by what percentage different materials have increased over the past 12 months. On average, the following rises were reported: Insulation up 16%; Bricks up 9%; Timber up 8%; Roof tiles up 8%; Slate up 8%; Windows up 7%; Blocks up 7%; Plasterboard up 7%; Boilers up 7%; and Porcelain products up 6%.
The impact of these material price increases includes more than half of construction SMEs (56%) have had their margins squeezed, while 49% of firms have been forced to pass material price increases onto their clients, making building projects more expensive for consumers. 17% of builders report making losses on their building projects due to material price increases.
Brian Berry, Chief Executive of the FMB, said: “What’s particularly worrying is that when prices have increased mid-project, almost one fifth of builders have absorbed the increase and therefore made a loss. Also, if material price increases weren’t enough of a headache for building firms, they are also experiencing material shortages with wait times ticking up across a range of materials and products.”Berry continued: “The rise in material prices is not just a problem for the country’s construction firms – it is also a problem for home owners. Half of firms have been forced to pass these price increases onto their clients, meaning building projects are becoming more and more expensive. This problem has worsened recently with more than twice as many firms passing material prices on to their clients now compared with nine months ago."
More at www.fmb.org.uk.
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