Housebuilders will need to plan over predicted increased demand for materials and talk to suppliers now to avoid pinch points next year, the Construction Leadership Council has warned.
- Manufacturers have reduced capacity over the last 18 months
- Skilled workforcedecline and closure of old facilities pose a threat
- Demand expected to surge in the second half of 2025
Lack of materials could inhibit housebuilders’ next year
A shortage of materials could be the biggest hurdle for housebuilders stepping up their activity in 2025, warns the Construction Leadership Council, CLC.
The organisation has urged builders to use the next few months to plan so they are not caught out in the second half of next year.
Construction Products Association chief executive Peter Caplehorn said: “Work closely with your supply chain, and forecast and communicate your requirements early with suppliers, distributors and builders’ merchants.”
The CLC’s material supply chain group’s findingshave shown over the last 18 months manufacturers have adjusted capacity to match lower levels of demand.
European demand might be a further pressure point
The report notes that as well as UK manufacturers this also includes European suppliers of products such as structural timber who are subject to demand from other countries.
Builders Merchants Federation, BMF,chief executive John Newcomb said:“Demand worldwide has declined in the last two years leading to the closure of older facilities, the loss of skilled labour, and very low stock levels.”
The CLC has warned this may be “problematic” if there is a rapid surge in demand through 2025 as housebuilders respond to the government’s ambitions to build 300,000 new homes a year.
“Collaborative, ongoing communication throughout the whole supply chain is mutually beneficial and essential to a healthy, productive UK construction industry,” said Mr Caplehorn.
The BMF said it was undertaking researchto establish capacity amongst UK producers and assess how quickly this could be increased to accommodate the housebuilding level of demand.
Brokers Hank Zarihs Associates said development finance lenders agreed that now was a good time for SME developers to start negotiating with suppliers.
The Structural Timber Association, STA, said there was “untapped capacity” among its members to scale up to meet anticipated demand.
STA chief executive Andrew Carpenter said: “We see no major supply-side challenges for 2025.However, if demand rises significantly, price inflation across building products, including timber, may occur, though supply to the UK is expected to remain steady.”
The Brick Development Association, BDA, said it was not anticipating restrictions in supply next year to meet the demand for new homes.
BDA chief executive Robert Flello said: “In 2019, before the downturn in demand, our UK manufacturers produced enough bricks to build 207,000 homes and since then the UK industry has added new capacity with both new factories and adding capacity to existing ones.”
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