Months have now turned to years. The continuing trend of rising material costs show no sign of letting up. This comes as a double blow for the construction industry with labour shortages and inflation rates, meaning labour across the board now commands a higher price. Several factors are contributing to this trend, which, together, have created the perfect storm to send material prices rocketing.
February 2020 and the COVID pandemic ground well-oiled production lines to a halt. For months, raw materials and processing facilities’ production was greatly reduced or stopped altogether creating a substantial backlog of orders. With the construction industry being one of the few to remain operational during the pandemic, there was no cease in demand for materials, but a faltering supply line forced the price index to rise.
While material production lines are now back in operation, further external factors are now influencing price rises. The recent conflicts in Ukraine, for instance, have driven rising energy costs for European producers. With 40% of Europe’s gas supply coming from Russia a need to find viable alternatives sent the price of energy through the roof. This cost has ultimately been passed down the road to the final consumer.
It is well-documented that the rate of inflation is rising at its fastest rate for 30 years. The Construction Leadership Council (CLC) recently commented that they predict inflation to continue to contribute to rising material costs until the end of the year.
The combined influence of these issues has forced “all work” prices up by 25.2% compared to the year previously. So, what can be done to alleviate some of these costs? Well, here at Zebra we are happy to assist with the pre-construction planning element of your project. By sitting down with you and the architects at this stage we can undertake a value engineering exercise. This process provides valuable insight into what possible build costs and potential cost-effective alternatives to ensure your vision can be achieved.
Images taken at our Prices Court project. We worked on this project during Covid and saw a huge increase in the price of brick during this time.
