Construction leaders draw up five-point plan to combat inflation

A five-point plan to mitigate the impact of rising inflation on construction companies has been published by the Construction Leadership Council (CLC).

The list – created by the CLC in conjunction with sector experts – aims to resolve issues around the availability and cost of key materials amid current pressures.

Problems around the supply and expense of building materials have been exacerbated by recent disruptive global events, such as the Ukraine crisis, according to the council, which flagged up reports of 50 per cent increases for some products in recent weeks.

The CLC added that the plan represented ambitions to co-ordinate an industrywide effort to minimise risk and reduce the impact of inflation where possible. It includes:

  • Developing market intelligence about risk hotspots;
  • Publishing guidance on price inflation indexation and commercial issues;
  • Preparing case studies on good practice in response to current inflation;
  • Running industry briefings on conflict avoidance; and
  • Researching long-term capacity loss from Ukraine, Russia and Belarus, and the impact on the sector.

Speaking about the plan’s launch, CLC member and Mace chief executive Mark Reynolds said: “Across our industry we are seeing businesses facing real challenges with inflation that are well above those seen in the sector for many years.

“There is no one party that can tackle this issue alone and we can’t pass the problem on to others to solve. We all must work collaboratively – clients, contractors and everyone in our supply chain – to provide support where possible to limit the impact on firms nationwide.”

A spokesperson for the CLC said it hoped to have guidance on inflation indexation by early June at the latest and that it would publish research on long-term capacity loss from Ukraine by the summer.

It is also asking the sector for its views on how the current supply difficulties are affecting businesses across UK construction to “guide and inform” further action.

Earlier this month, material prices shot up again after a period of gradual decrease, following Russia’s invasion of Ukraine, with timber and steel two of the hardest hit materials. To add to this, inflation also rose by 9 per cent in the 12 months to April, according to the Office for National Statistics (ONS).

Last week, manufacturing experts called for a bespoke taskforce to assess the health of the UK’s current and future supply chain to protect manufacturers against unpredictable “economic shocks”.

The CLC’s Product Availability working group has previously warned that material supplies are issuing quotes that expire after 24 hours as inflation fears grip the industry amid disruptive global challenges.

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