Building materials factories should explain their price growth

In recent months, a significant increase in prices for all building materials has been observed. As a result, industry leaders are calling for greater transparency regarding current and planned price increases for materials. But what are the real reasons for the price growth, and how will it affect the construction industry in the future?

The main source: Materials firms urged to explain price rise reasons

The reason for that situation?

In its latest update, the Construction Leadership Council’s Material Supply Chain Group stated: “One of the key issues across the supply chain remains the lack of detailed explanation accompanying price increases. This makes it difficult to justify and communicate these costs to clients.”

“Clearer evidence and transparency would be welcomed, even if the increases themselves are not.”

The group stated that the war in the Middle East will continue to drive prices up in the near future. It will continue despite the lack of demand growth, as currently only concrete roof tiles are in short supply.

It added: “While there is recognition that pricing pressure is justified in some areas, particularly for energy-intensive products (such as steel, bricks, concrete, glass, insulation) and petrochemical products (such as adhesives, bitumen, PIR, and PVC pipes), price increases in other product categories are considered difficult to explain solely by base costs.”

How will building materials price growth influence the industry in the future?

The increase in building material prices will have a negative impact on the industry in the future. The Material Supply Chain Group adds: “Rising raw material prices for metals, including steel, brass, tungsten, and copper, were already evident before the conflict in the Middle East. There is concern that further increases are expected, as some imported steel products will face stricter UK tariffs and quotas from July 1.”

“As costs are distributed across the supply chain, profit margins are being reduced at every level. We know, for example, that pricing pressure is seriously affecting roofing and other specialist subcontractors. They are trying to balance rising material costs within existing 6–12-month fixed-price contracts. They highlight a significant pressure point in the supply chain.”

Fencyx, as one of the leaders in the UK building industry, follows this situation. We hope that the government will take all necessary actions and help stabilize building material prices. Otherwise, it may have a significant impact not only on the industry, but also on the economy.

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