Particle board, concrete-reinforcing bars and fabricated structural steel have surged in price year on year, according to the government’s latest construction materials and activity tracker.
The statistics compiled by the Department for Business, Energy and Industrial Strategy show that particle board increased in cost by 44.8 per cent year on year to February 2022, followed by concrete-reinforcing bars, which jumped in price by 43.6 per cent, and fabricated structural steel, which rose by 35.9 per cent.
The latest calculation for material price inflation marks the final month before the Russian invasion of Ukraine on 24 February, which has further squeezed the availability of materials.
The government announced yesterday that it was reviewing the tariff rate quotas of Russian and Belarusian steel imports, and would potentially reallocate quotas from those countries to other supplier countries, in an effort to “help ensure a regular supply of steel needed for construction, engineering, the automotive industries and other uses”.
Last month, industry groups warned that materials such as steel had soared in price, which was posing a threat to the viability of small and medium-sized construction businesses.
Meanwhile, Timber Trade Federation chief executive David Hopkins urged the body’s members to cease trading with Russia and Belarus immediately, despite conceding that this would bring about “huge disruption”.
UK Steel director-general Gareth Stace said energy costs and supply side challenges meant that the sharp price rises seen already this year could be “just the start”.
And Brick Development Association chief executive Keith Aldis said fresh restrictions on Russian gas flows to European producers could hit imports.
The latest summary of activity found that the material price index for new work had risen by a fifth over the past 12 months (20.2 per cent), with non-housing work seeing a 21.8 per cent increase.
Month-on-month non-housing work was up 1.5 per cent; new housing rose by 1.1 per cent; and repair and maintenance increased by 0.6 per cent. A number of materials also fell in price, with gravel, sand and clays falling by 4.1 per cent, and insulating materials dropping by 2.1 per cent.
In terms of supply and demand for materials, the latest figures show that brick deliveries fell by almost 5 per cent, although concrete-block deliveries rose by 22.5 per cent year on year.
The level of construction output was up 1.4 per cent, or £197m above the pre-COVID level recorded in February 2020.
The recovery is nuanced, however, with the recovery at sector level showing that infrastructure was 37.9 per cent above the pre-pandemic level, and private commercial work was 27.8 per cent below the level recorded over the 2020-22 period.