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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

Llandeilo going for Fair Trade Status

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A NEW steering group has formed in Llandeilo to achieve Fair Trade status for the town.

“Many of our local shops and venues already stock or serve Fair Trade products and I believe Llandeilo deserves to be officially recognised for this,” says co-founder town councillor Christoph Fischer.

“It’s fantastic to see so many businesses and stakeholders committed to Fair Trade in Llandeilo,” says Candace Browne of Y Pantri Glas, Llandeilo’s Zero Waste and Natural Foods store. “However, for me Fair Trade extends beyond insuring workers growing imported exotic produce like bananas and chocolate are treated fairly but also to trading fairly with our local producers and sourcing good food locally. As Chair of Slow Food Cymru, Slow Food Town status with a shared vision of “Good Fair Food for All” would also be great for businesses to work towards for our community.”

The group, which has representatives of several businesses and interested individuals, are currently mapping all products that local shops, schools, groups and organisations offer and are lobbying the town council and other bodies to get behind the movement by declaring their own commitment to Fair Trade.

“As town councillor and as individual I feel this initiative fits perfectly well with the trend in town for fair trade,” says Fischer. “As Member Pioneer for the Llandeilo Coop part of my role is to initiate projects like this and bring all parts of the community together. We already had positive replies from Café 139, The Lighthouse, Heavenly, Ikigai, CK’s, Crown Stores, Umami and Llandeilo Primary.”

If you and your organisation want to commit to Fair Trade or are stocking Fair Trade products, please contact ChristophFFischer@googlemail.com

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Council determined to close Aberystwyth’s window of waste

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ABERYSTWYTH town centre is provided with regular and reliable waste collection services. Unfortunately, some localised, seasonal issues continue to arise. One of the solutions to this is to close the Window of Waste!

The window of waste is the time between when waste is presented for collection and when it is actually collected. The longer the window of waste is open the more issues and problems that occur which includes the waste being ravaged by seagulls, other animals as well as the elements. This causes the problems that are experienced in some town centre locations mostly on and around waste collection days.

The County Council has been very proactive in Aberystwyth over recent years in introducing interventions and changes to waste collection arrangements with a view of addressing or improving long standing issues. These are currently being reviewed and include but are not limited to:

·         Additional early waste collections in the town centre to collect waste that has been presented too early.

·         Provision of wheelie bins on North Parade and heavy duty sacks at various streets to contain waste between the time it is presented and collected

·         Provision of free caddies and caddy liners for food waste and boxes for glass

·         Localised information provision

·         Closer working between Waste Collection and Street Cleaning teams

·         Closer monitoring

·         Ongoing liaison with residents and landlords

As part of Caru Ceredigion and Caru Aber all residents are encouraged to play their part in being part of the solution rather than the cause of the problem. This means working with us to ensure that:

·         Aber’s streets are kept clean and attractive at all times

·         Aber’s waste is dealt with in the most efficient way possible from a cost and environmental perspective

·         Aber remains a fantastic place to live and visit

·         Aber maintains the superb positive profile and image it deserves

We are asking all residents to help us close the window of waste by presenting the Right Waste in the Right Way and on the Right Day:

·         Right Waste: making full and proper use of the services provided for recycling and food waste which are collected every week

·         Right Way: presenting the waste in suitable containers, which includes the food caddies and glass boxes provided by the Council.  A range of bins from wheelie bins to traditional bins are available from local outlets or online to store and present waste.

·         Right Day: waste should only be presented for collection by 08:00 on the day of collection.

Businesses are reminded that they have a legal responsibility to have trade waste arrangements in place for all the waste their business produces

For the size and nature of the town, Aberystwyth is a clean town, which contributes to its overall attractiveness as a fantastic place to live and visit. If this were not the case then so many local people and visitors would not hold it in such high regard.  

For more information regarding Ceredigion County Council’s waste collection services, including a postcode finder, please visit www.ceredigion.gov.uk.

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Business

Lidl branded best value as expanded store opens in Aberystwyth

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Lidl has been revealed as the cheapest supermarket in May, according to the latest monthly analysis from Which?.

Which? compared prices for a trolley of 20 items every day throughout May and found that on average, shoppers would have paid £22.66 at Lidl, beating the big four and Aldi to the accolade. Products checked included own-label products such as tomatoes and chicken drumsticks and branded goods such as Nescafé coffee, to see how UK supermarkets compared. The announcement recognises Lidl’s continued commitment to offering customers top quality products at great value prices as the retailer expands further into the future. Earlier this year, Which? named Lidl as the Cheapest Supermarket 2020, demonstrating that Lidl continues to offer UK shoppers consistently unbeatable prices.

The news comes as the supermarket expanded its operation in Aberystyth.

This pic of the new store was taken by Rose Voon.

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