Rising costs and material shortages continue to pose a risk to recovery, warns CPA | news


The construction products association has warned that material cost and delivery problems remain real concerns despite a fourth quarter of expansion in a row.

According to the survey, nearly two-thirds of heavy side manufacturers and 44% of light side manufacturers said sales were up compared to the first quarter.

Heavy-side products are typically construction materials used early in the construction process and used in transportation and other civil engineering projects, while light-side products are typically installed later in the construction process and include interior fittings and services.

67% of light-side businesses expect product sales to grow this year, driven by demand for private housing and residential repair and maintenance. This is supported by ongoing government incentives and an increased appetite for real estate with more space.

On the other hand, 79% said they expect another sales boom – the highest proportion in almost eight years. This has been attributed to working on large infrastructure projects.

However, concerns about supplies of raw materials and components in the coming year have dampened optimism, with the issue remaining the top concern of manufacturers due to bottlenecks in the global supply chain.

Material / component supply was cited by 52% of heavy-side companies and 45% of light-side companies as the factor most likely to slow production in the next 12 months – the highest proportions ever.

Next came commodity prices as a potential drag on heavy-side businesses, while labor availability concerns were on the agenda for light-side businesses.

and 61% of light-side companies expect to increase their headcount – the highest balance in seven years.

Amandeep Bahra, CPA economist, said while the construction products industry rebound was good in progress It was clear that there were still potential risks.

She said: “Given the ongoing problems in the global supply chain due to the shortage of shipping containers and drivers, a record proportion of manufacturers cited the supply of materials and components as one of the main restrictions for the 12 month period. This inevitably fueled heavy side concerns about high commodity prices in the coming year. Since self-isolation and the Brexit rules also bite, the long-standing problem in the industry about the availability of labor was a central risk for Lightside companies. “

Travis Perkins and Marshals both urge the government to rethink its strategy and building exempt from self-isolation rules this week.



Source link