Chartered Institute of Building Magazine of the Chartered Institute of Building
CM NEWSLETTER
  • 9 Jan 2017
  • 0 comments

Material prices rise for 70% of SMEs

Seven out of 10 builders have seen an increase in material prices due to the falling value of the pound and this in turn is hitting the pockets of homeowners, new research has revealed.

In the latest Federation of Master Builders (FMB) State of Trade Survey, 232 SME construction firms were questioned, with 70% reporting materials price hikes. The FMB states the rising prices are inevitable due to the depreciation of sterling because around a quarter of materials used by the UK construction industry are imported.

Sarah McMonagle, director of external affairs at the FMB, said: “Thousands of smaller building firms are grappling with the rising cost of materials caused by the depreciation of sterling since the EU referendum.

“More than 70% of smaller building firms have experienced increased costs as a result of the weakened currency, with additional increases of 10 to 15% expected as the new year unfolds.

“Anecdotally, construction SMEs are already reporting an increase of 22% in Spanish slate and 20% increase in timber.

“A quarter of all materials used by the UK construction industry are imported – this is significant and underlines the vulnerability of the industry to sudden fluctuations in the strength of our currency. The combined pressure of higher material prices and the rising cost of skilled labour represents a serious challenge to builders.”

Consumer choice may also be reduced as homeowners face having to compromise on aspects of projects because materials have become too expensive, with builders having to quickly re-evaluate the price of jobs, she added.

She concluded: “What this means is that homeowners could start to see the cost of their building projects increase.

“There is also an added headache for the builder, as material price rises can come at short notice and if they are mid-project, the original costing is no longer accurate. This makes pricing jobs problematic and leads to construction SMEs having to cover themselves against sudden price swings.”

Leave a comment

News

25 May 2017 Fire investigations uncover the cost and scale of poor workmanship

25 May 2017 Build UK works towards single safety assessment

25 May 2017 Skanska names new executive vice president

25 May 2017 ITV submits plans for new South Bank HQ

25 May 2017 Cooling system for Qatar 2022 stadium revealed

25 May 2017 VIDEO: First phase of Wimbledon's No.1 Court project completed

25 May 2017 Arup attacked by 'ransomware' in Hong Kong

23 May 2017 Reader panel's thoughts on the general election

23 May 2017 New procurement method to trial at Derby Silk Mill

23 May 2017 Housing associations' output up 13% last year

23 May 2017 Wates promotes sustainable innovations again

23 May 2017 The world's five most important mega-projects

23 May 2017 Chris Blythe picks up leading membership award

22 May 2017 General election: What policies will win construction's vote?

22 May 2017 Three company directors jailed for manslaughter

22 May 2017 Qatar 2022 workers still suffering abuse, says Amnesty

22 May 2017 L&G makes senior hires to boost offsite operation

22 May 2017 Sky Fence stops drones flying over prison

21 May 2017 CDM 2015 reforms fail to hit home, reveals survey

18 May 2017 Wates to revamp Goldfinger's Brutalist tower