‘Thousands grappling with material cost rises’
10th January 2017

Nearly three quarters of all small building firms are feeling the pinch of materials price increases due to the weakening of Sterling, according to research from the Federation of Master Builders, which also forecasts increases of up to 15% in the year to come.

Sarah McMonagle, Director of External Affairs at the FMB, said: “Thousands of smaller building firms are grappling with the rising cost of materials caused by the depreciation of sterling since the EU referendum. More than 70% of smaller building firms have experienced increased costs as a result of the weakened currency, with additional increases of 10 to 15% expected as the new year unfolds.

“A quarter of all materials used by the UK construction industry are imported – this is significant and underlines the vulnerability of the industry to sudden fluctuations in the strength of our currency. The combined pressure of higher material prices and the rising cost of skilled labour represents a serious challenge to builders.”

She also warned that consumer choice may be reduced as some home owners face having to compromise on aspects of their project., and she added: “There is an added headache for the builder, as material price rises can come at short notice and if they are mid-project, the original costing is no longer accurate. This makes pricing jobs problematic and leads to construction SMEs having to cover themselves against sudden price swings.

“Some builders are attempting to mitigate this by introducing larger contingency funds when pricing for a job, or by stipulating in the contract that the overall contract price will change in the case of material price hikes, making client budgeting more tricky.”