Surge in demand could be ‘problematic’ for UK construction industry
18/11/24
The Construction Leadership Council (CLC) has warned that
the decreased capacity of UK construction firms could be ‘problematic’ should
there be a surge in demand in 2025.
A recent report from the co-chairmen of the Material Supply
Chain Group, John Newcomb and Peter Caplehorn, said that while the UK continues
to show good levels of product availability, the closure of older facilities,
the loss of skilled labour and very low stock levels could cause issues heading
into the new year.
The report says: “The main concerns flagged by the Group
centred on the potential impact of the government’s ambitions for new housing
and infrastructure when, over the past 18 months, manufacturers have adjusted
capacity to match far lower levels of demand.
“This includes construction products manufactured in the UK
but also materials, such as structural timber, which are predominantly sourced
from European suppliers, and are subject to demand from many countries, not
just the UK.
“Demand world-wide has declined in the last two years
leading to the closure of older facilities, the loss of skilled labour, and
very low stock levels.
“This may be problematic if there is a rapid surge in demand
for construction products as we progress through 2025.”
The report added: “Understanding the complexity of the
construction materials supply chain and the limitations this presents, will be
essential to the successful planning and implementation of the government’s
plans for growth.
“The Group is undertaking research to establish capacity
amongst UK producers and assess how quickly this could be increased to
accommodate the level of demand required to achieve 300,000 new homes a year.
“The Group also recognises the global nature of the full
construction supply chain, which is more difficult to assess.”
In their report, Mr Newcomb and Mr Caplehorn suggested that
the industry use the remainder of the year to prepare for any upturn in demand.
“Despite these concerns, the latest industry forecasts
expect any notable growth prospects, particularly for housing activity, to
occur in the second half of 2025,” the report added.
“Having noted the complexity and length of the material
supply chain, members of the group strongly advocate that industry uses this
time to plan in advance, work closely with your supply chain, and forecast and
communicate your requirements early with suppliers, distributors and builders’
merchants.
“Collaborative, ongoing communication throughout the whole
supply chain is mutually beneficial and essential to a healthy, productive UK
construction industry.”