Construction Industry Update – September 2023

First sign of price falls for construction products

The first price drops for construction materials are starting to appear as supply returns to pre-covid levels and demand drops as the housing market continues to stagnate.

The latest update from Construction Leadership Council’s Product Availability working group said: “The supply of most building materials returned to pre-covid levels. Tis includes bricks, blocks, boilers, plaster and timber products.

“Price inflation has stabilised. Whereas a year ago we were seeing increases of over 5%, if products are increasing in price, it is now at 1-2%.

Subbies facing squeeze as main contractors tighten belt

Payment disputes are intensifying on site as main contractors look to hold on to as much cash as possible in the current economic climate

The Construction Leadership Council also sounded a warning this week for the supply chain as economic conditions tighten.

It said: “We are also aware that, the availability and costs of financing options increasingly limited, commercial behaviour is likely to harden putting pressure on lower tiers and SME companies reducing cash-flow capacity and making liquidity a greater challenge.”

Sunak details zero carbon target climbdown

Prime Minister Rishi Sunak has detailed his plans to roll back targets to get the UK to net zero in 2050.

His plan to water down green targets include:

• Proposed ban on diesel and petrol cars by 2030 delayed to 2035. People still allowed to buy second hand cars after that date.
• “Far more time” to transition from gas boilers to heat pumps. Householders will only be required to switch when they are due to change their boiler, even then not until 2035. New exemption not to switch to heat pumps at all.
• Boiler scrappage scheme will be increased by 50% to £7,500.
• Drop plans for rented properties to improve energy efficiency of homes.
• No ban on new oil and gas development in the North Sea.