Material cost rises are choking trade
Apr 17 2009 by Catriona Lingwood, Constructing Excellence in the North East
THESE increases are far and away the largest I have been faced with in 24 years as a professional construction buyer.
We may be less than four months into 2009, but the article’s opening statement from one contractor refers to massive rises in materials prices since the beginning of the year.
The contractor in question claims to have been faced with rises from £75 per cubic metre for concrete before Christmas to £86 now.
That’s a rise of around 15%, yet tender prices are going down.
Clearly the sums don’t add up for contractors forced to pay more for the materials to do a job they are being forced to lower their price for.
It’s not just concrete, it’s things like blacktop and aggregates that are rising in cost as well.
We keep hearing that the price of oil has fallen -– at least until the start of this month when the Government’s taxation increases kicked in (kicked who? In where? That’s a rhetorical question, by the way).
Surely this price decrease could be passed on by the quarries?
Apparently not, they say, arguing that their own base costs for asphalt and concrete have risen – some say by about 12%, counteracting the savings on oil prices and stopping the quarries from being able to lower prices.
When you take it to the next stage to find out why those from whom the quarries buy their materials have increased their prices, no doubt they will point to their own supply chains and say costs have risen.
And on it would go. Somewhere, somebody at the end of the line is making money, but I’m sure they aren’t working in the construction industry and our sector is feeling it at all levels.
Survival is the first priority. Our sector has to be standing when the gloom lifts, so that we can rebuild UK construction to develop the future for tomorrow.
We can not survive without client satisfaction and we can not provide that without quality materials.
But in an economy that is already choking the life out of construction, these massive increases in the cost of materials – wherever the buck stops – are threatening to put the pillow over the faces of contractors and finish the job.
For more information on Constructing Excellence in the North East, please contact regional director, Catriona Lingwood, on 0191-383 7435 or firstname.lastname@example.org.
Catriona Lingwood is regional director, Constructing Excellence in the North East.