According to the CPA Construction Trade Survey, the supply chain within the construction industry continued a strong upward trajectory into the first quarter of 2022. Bearing in mind the conflict in Ukraine and inflation costs, this is encouraging news for the sector. This is also a fair reflection of what was stated in the earlier State of Trade survey which was released in April.
In Q1, 43% of heavy side manufacturers and 50% of light side manufacturers reported that sales increased compared to 2021 Q4. For SMEs, activity was driven by new build housing and RM&I, which has proven to be one of the most resilient sectors within construction.
Data released from BEIS displayed materials prices rose by 21.9% in Q1 which was considerably outdoing UK CPI inflation, which itself is at a historic high. The primary factor for driving the increasing inflation costs were materials for SMEs and product manufacturers also reported an increase in energy and fuel costs across the board.
Rebecca Larkin, CPA Senior Economist said: “Inflation can be seen throughout the supply chain, starting with manufacturers’ input prices, and is particularly acute for energy-intensive heavy side firms, whilst data from BEIS has shown year-on-year increases of over 20% in construction products and materials prices since August 2021. It is, therefore, no surprise that materials were the key driver of SME builders’ costs in Q1.”
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Key survey findings include:
In general, despite the increased pressure of higher costs and inflation, the construction products manufacturing industry has seen a strong start to Q1. Growth in sales is expected to continue during 2022, albeit alongside further upward pressure on input prices.
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