NAVIGATING CONSTRUCTION CHALLENGES: STRATEGIC PLANNING IN TIMES OF MARKET UNCERTAINTY

In times of market uncertainty, strategic planning is essential for construction projects. Securing materials early is crucial to avoid delays and rising costs. 

So the General Election came and went - but we are still no nearer to knowing how our impending exit from the European Union will pan out.

Did you notice how the currency markets immediately plummeted when the exit poll forecast a hung parliament?

Any uncertainty is bad for business.

So how can you shore up your company to weather the storm?

My advice would be to plan ahead to try to insure against lost construction days.

Currently there are many key building components which are either shooting up in price, becoming more difficult to source or both.

These are the items you need to order well ahead of schedule

Next month the price of PIR insulation will go up again, by about 12%. It only went up a similar amount in March/April, and that hike was following a similar increase before Christmas 2016.

The main issue at present is a shortage of the key chemical used in the production of all PIR. Currently the market is very busy and the larger house buyers are buying up insulation almost before it is manufactured. With their impressive buying power, it’s no surprise there is very little left over for smaller concerns and projects.

Another item on most housebuilder’s shopping lists is slate. The cost of slate has been rising dramatically, mirroring the fluctuation of the pound. Most of our slate comes from Spain, or further from China and Brazil. As Brexit negotiations get under way, this pattern will become familiar. Unfortunately even when the pound dips, the price rarely drops accordingly. This coupled with the lead times of up to 3 months on most concrete roof tiles makes the whole roofing market challenging to say the least!

You can’t achieve many projects without plasterboard and a serious supply shortage means that many distributors are having to wait a lot longer than usual for even basic stock to arrive.

With smaller builders who concentrate mostly on house conversions and extensions, they will run into similar problems to the larger building companies but without the favourable economies of scale.

Sometimes this oversight will result in a costly delay to projects being finished.

Good news and bad

Steelworkers breathed a sigh of relief when their company was bought out recently and since then, the industry has been enjoying a revival. But this upturn in the market has resulted in – yet again – soaring prices.

Couple this with a shortage in skilled labour, fewer apprenticeship places and depleted training courses, and it’s a heady, toxic cocktail for many builders.

So what can you do?

It doesn’t have to be all doom and gloom. My advice is to plan well ahead. A couple of weeks is no longer enough to source materials. You need contingency plans in place and must consider all eventualities.

I get many calls from clients wanting roof tiles but in some cases, there is a three month lead time for these. Projects are stalling because they can’t get their hands on these roof tiles until too late. Think about all materials you will need and how long each will take to receive.

With a bit of foresight, you can overcome much of the uncertainty of today’s unsettling times.

If you are struggling to find any of the products mentioned above then please feel to get in touch and we will try our best to be of assistance.

Whatever you need, call us on 01274 602367 or email us at sales@buildershoponline.co.uk.