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Materials’ price rise squeezes SME builders

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Price up: Building material price is harming SMEs

MORE THAN half of small building firms say that rising material prices are squeezing their margins and the same percentage have had to pass these price increases onto consumers, according to the latest research by the Federation of Master Builders (FMB).

Small and medium-sized (SME) building firms were asked which materials are in shortest supply and have the longest wait times. The average results were as follows (in order of longest to shortest wait times):

  1. Bricks were in shortest supply with the longest reported wait time being more than one year;
  2. Roof tiles were second with the longest reported wait time being up to six months;
  3. Insulation was third with the longest reported wait time being up to four months;
  4. Slate was fourth with the longest reported wait time being up to six months;
  5. Windows were fifth with the longest reported wait time being more than one year;
  6. Blocks were sixth with the longest reported wait time being up to four months;
  7. Porcelain products were seventh with the longest reported wait time being more than one year;
  8. Plasterboard was eighth with the longest reported wait time being up to two months;
  9. Timber was ninth with the longest reported wait time being up to two months;
  10. Boilers were tenth, with the longest reported wait time being more than one year.

SME building firms were also asked by what percentage different materials have increased over the past 12 months. On average, the following rises were reported:

  • Insulation increased by 16%;
  • Bricks increased by 9%;
  • Timber increased by 8%;
  • Roof tiles increased by 8%;
  • Slate increased by 8%;
  • Windows increased by 7%;
  • Blocks increased by 7%;
  • Plasterboard increased by 7%;
  • Boilers increased by 7%;
  • Porcelain products increased by 6%.

The impact of these material price increases includes:

  • More than half of construction SMEs (56%) have had their margins squeezed, this has gone up from one third (32%) reporting this in July 2017;
  • Half of firms (49%) have been forced to pass material price increases onto their clients, making building projects more expensive for consumers, this has gone up from less than one quarter (22%) reporting this in July 2017;
  • A third of firms (30%) have recommended that clients use alternative materials or products to those originally specified, this has gone up from one in ten reporting this in July 2017;
  • Nearly one fifth (17%) of builders report making losses on their building projects due to material price increases, this has gone up from one in ten reporting this in July 2017.

Brian Berry, Chief Executive of the FMB, said: “Material prices have rocketed over the past year. The reason for this could include the impact of the depreciation of sterling following the EU referendum still feeding through. High demand due to buoyant international markets could also be contributing to price increases. What’s particularly worrying is that when prices have increased mid-project, almost one fifth of builders have absorbed the increase and therefore made a loss. Also, if material price increases weren’t enough of a headache for building firms, they are also experiencing material shortages with wait times ticking up across a range of materials and products. Worst case scenarios include firms waiting for more than one year for a new order of bricks.”

Berry continued: “The rise in material prices is not just a problem for the country’s construction firms – it is also a problem for home owners. Half of firms have been forced to pass these price increases onto their clients, meaning building projects are becoming more and more expensive. This problem has worsened recently with more than twice as many firms passing material prices on to their clients now compared with nine months ago. What’s more, home owners should be prepared to have to use alternative materials or products to their first choice. One third of firms have recommended that their clients should use alternative materials or products to those originally specified. Now more than ever, it’s important that builders and their clients keep the lines of communication open in order to stay within time and within budget. Specified products or materials may need to be swapped for alternatives or clients will need to accept the additional cost.”

Berry concluded: “We are calling on builders merchants to give their customers as much advance warning of forthcoming material price increases or wait times as possible so that firms can warn their customers and plan ahead. We are also advising builders to price jobs and draft contracts with these material price rises in mind. The FMB’s latest State of Trade Survey shows that almost ninety per cent of building firms are expecting further rises over the next sixth months. This makes quoting for jobs difficult but if builders flag the issue to their client from the outset, and include a note in the contract that prices may be subject to increases, they shouldn’t be left short. What we don’t want is for the number of building firms making losses on projects to increase as this could result in firms going to the wall. A large number of collapsing construction companies will have a terrible knock-on effect in the wider economy.”

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Business

Young person celebrates kickstart job and overcomes several obstacles

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22-YEAR-OLD Lee from rural Ceredigion found it challenging to secure permanent employment. Having no mode of transport as well as his diagnosis of autism and depression meant that Lee has experienced significant barriers with finding and maintaining employment. Communities For Work Plus (CFW+) provided Lee with the right tools and opportunities to find the right role for him. He now has a job at ASN Watson (Savers), with a more positive future ahead.

Lee was struggling financially with increasing debt and although he had been working in the past, the nature and environment of the work was not practical for Lee’s abilities; he was often misunderstood by employers.

After being referred to CFW+ from Job Centre Plus, Aberystwyth, Lee received support with job searches, applications, cover letters, cv writing, and interview skills. He’s now in paid employment, secured through the Kickstart Scheme. The UK Government Kickstart Scheme provides funding to employers to create jobs for 16 to 24-year-olds on Universal Credit.

Lee said: “The project helped me a lot as I struggle to know where to start when it comes to finding jobs, but this definitely helped. Communities for Work+ has got you covered!”

Communities For Work Plus is a Welsh Government funded project, delivered by Ceredigion County Council which supports individuals in or at risk of poverty, aged 16 or over, across Ceredigion and throughout Wales. Participants may be experiencing in-work poverty, unemployment, living on minimum wage, or struggling to pay basic monthly outgoings on sporadic zero-hour contracts.

Misha Homayoun-Fekri, CFW+ Mentor said: “Lee has been a pleasure to support. He was always very responsive, and we worked together every step of the way. I am so pleased for Lee that he has found a job that he can be happy in.”

Since starting his new role, Lee has become a lot more independent, his mental health has improved, and has started to save money for the future.

Councillor Wyn Thomas, Ceredigion County Council Cabinet Member for Schools, Lifelong Learning and Skills, said: “One in 100 people are on the autism spectrum. A report released by the Office for National Statistics shows that only 21.7% of autistic people are in employment; meaning that businesses are missing out on the opportunity to benefit from the strengths that autistic people can bring to the workplace. So, it’s great to hear that Lee has found an autism-friendly employer through the support provided by CFW+ and I encourage more employers to be more inclusive to all abilities when considering employees.”

If you think the project may be able to help you or if you would like more information, contact the team on 01545 574193 or email TCC-EST@ceredigion.gov.uk.

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Business

Mid Wales distillery wins COVID 19 Resilience Award

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THE TEAM at Ceredigion distillery, In the Welsh Wind, is celebrating after winning the COVID 19 Resilience Award at the inaugural Wales Food and Drink Awards.

The awards shortlisted businesses in a range of categories to reflect the diverse nature of what is a key sector in the Welsh economy and one that has a global reputation for excellence.

The COVID 19 Resilience Awards, sponsored by Cywain, recognised businesses that had gone above and beyond not only to support their communities but to grow and develop despite the pandemic.

During the first COVID 19 lockdown, In the Welsh Wind’s team was initially reduced to just the owners, Alex Jungmayr and Ellen Wakelam, with their young son.

Business manager Joe Lewis worked from home and the remaining three staff were placed on furlough. However, Ellen and Alex saw that the Cardigan area needed hand sanitiser and they were able to produce it, so they moved production away from gin and into sanitiser overnight.

Ellen said: “It was clear to us that we were in a position to be able to help the community, so there was no question that we would set up hand sanitiser production. From one small photo on social media of a bottle of hand sanitiser, we had queues of people up the distillery drive coming to collect.

“We also supplied many community groups and organisations including the RNLI, the Post Office delivery teams, the police, care homes and doctors’ surgeries. We provided the sanitiser free or at cost where we could.”

In addition to hand sanitiser, during the pandemic the team launched the distillery’s first ‘own brand’ Signature Style gin to much acclaim.

The company also worked with Bluestone Brewing Co to save 3,500 litres of Bluestone Summer Rocks beer from being wasted by creating a cask-aged Welsh vinegar which has since been featured on TV.

The business has grown significantly since September 2020, now employing 18 people and, most recently, has opened a gin bar, Bar 45, in Cardigan.

Ellen added: “Winning this award is really a testament to the whole team and how we’ve not only survived but grown and succeeded through what has been an incredibly difficult time for everyone.

“It’s been an honour to be able to help the community where I grew up by providing hand sanitiser and to work with Bluestone on the vinegar project as well as seeing our own success with the launch of Signature Style.”

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Business

New owners at Cenarth Falls Holiday Park in Newcastle Emlyn

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SAVILLS, on behalf of a private client, has completed the sale of Cenarth Falls Holiday Park in Cenarth, Newcastle Emlyn, Wales, to Boutique Resorts Ltd for an undisclosed sum.

The holiday park is set on an attractively landscaped site extending approximately 11.52 acres (4.66 ha) which includes 1.92 acres of woodland. The holiday park has planning permission for 89 static caravan pitches and 30 mixed touring caravan pitches. At the entrance of the park there is a reception, sales office and games room. The property also provides a high quality fitness, hospitality and entertaining space including indoor swimming pool, gym, bar and function room licensed for a maximum of 290 guests, and owner’s accommodation comprising a three bedroom bungalow and adjoining two bedroom cottage.

Cenarth Falls Holiday Park is situated within the historic and picturesque village of Cenarth, Ceredigion, bordering Carmarthenshire and Pembrokeshire. The village is located in an Area of Outstanding Natural Beauty which attracts numerous visitors to the area. The River Teifi is renowned for excellent salmon and sea trout (sewin) fishing and the town of Cardigan is 10 minutes away with an array of shops and amenities. There are numerous sandy beaches nearby and many other activities on offer in the locality including walking, golf and water sports such as kayaking.

Richard Prestwich, Director in the Leisure and Trade Related team at Savills, says: “It has been a privilege to sell such a good quality holiday park, nurtured to its 5 star status over a 34 year period by the former family owner. The new owners are no strangers to high quality holiday businesses being an award winning holiday brand and they will look to improve the quality of the business further to complement their other holiday parks, with the nearest being Fishguard Bay Holiday Park.”

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