Materials and labour shortages hamper growth

Construction is suffering from a shortage of both materials and workers, as the industry recovers from the pandemic.

Figures from the ONS and PMI show that while construction is one of the fastest-growing industries following on from 2020’s shutdown, a lack of materials and workers to implement jobs is holding back growth.

  • Construction output fell 0.8% in May 2021
  • 0.7% monthly decline in April 2021.
  • These recent declines in monthly growths, follow exceptionally strong growth in February and March 2021 (3.7% and 4.7%) respectively.

What’s happening?

For a number of months, the CLC has been warning of materials shortages, with its latest statement confirming the crisis. Brexit pressures have added to the problem, with the industry relying on imports for a number of crucial products.

The latest CLC statement confirms: “Timber, roof tiles and some steel products continue to be in short supply, as is bagged cement which may have been impacted by some manufacturers undertaking overdue preventative maintenance.

“Paints, sealants and chemical products continue to be affected by raw material shortages, with paints additionally affected by a shortage of packaging, particularly metal cans. The situation with insulation boards has also become tighter, with PIR becoming harder to obtain and contractors actively seeking alternatives.

“Plasterboard has been subject to extended lead times with one major manufacturer indicating their products going on allocation. Some regions are also reporting delayed deliveries of bricks and blocks.

“Electrical products have been affected by raw material shortages, particularly steel products and semi-conductors, since Autumn 2020.”

How it’s affecting the public sector

With a strong pipeline and commitments to many projects across the public sector and growth in the private sector, a materials shortage could halt work in its tracks.

This has been coupled with the latest statement on labour supply from the ONS. The current demand for construction workers is at a near 20-year high, with 33,000 job vacancies in the sector. The skills crisis in construction has been discussed for a long time, and the industry is still struggling to bring young people into the sector. Together with Brexit pressures on the industry, there is a huge gap in personnel available to implement projects.

How you can take advantage

Latest market information tells us that there are many opportunities for SMEs across the public sector. Local Government continues as the most active sector, followed by Central Government and Education.

Market activity between 5 and 11 July shows that 35% of contracts published were for less than £100,000 – clearly indicating a continued opportunity for SMEs throughout the public sector.

Activity also suggests there is a strong future pipeline for public sector work, meaning a huge opportunity for construction suppliers – so register with S2G to keep your eye on upcoming opportunities.

If you’ve never worked with the public sector before, now is the time to get into the market. Register for free to gain access to our “Ready to Tender Checklist”, which will help you cover all bases when it comes to public sector procurement.