Why are construction costs increasing

Updated: Apr 26

If you are looking to build and extension, convert a loft or have some renovation work carried out in your home, through your research you have probably heard that prices have increased. Here are some of the reasons why we have seen material price increases:



The Timber Market

The coronavirus outbreak led to timber mills being closed in many countries as the various governments introduced lockdowns. Sweden is the UK’s largest timber supplying partner, with over 40% of UK timber imports, when they went in to lockdown, along with Lithuania and Latvia the UK had a massive gap in the supply chain.

Whilst the countries return to limited production with shift working and social distancing rules the cutting, milling and treating processes have all slowed down which means that stocks have run down.

The depleted stock level was met with an increase in demand as homeowners in “Lockdown” spurred a strong demand with home remodelling and construction. The situation was made worse with America increasing it’s homebuilding programme, they pushed prices higher and key suppliers in Europe diverted stocks to the USA.

As a result the timber merchants in the UK, to prevent having empty shelves have been paying whatever it takes to keep stock on their shelves – this means that the timber prices are at least 112% higher than a year ago – and there is still a very strong belief that these prices will continue to rise, and an expectation that prices in the market will be realigned and they won’t drop!



Plastics


Across the industry there is a shortage of the polymers required for making UPVC, Resins, Pipes and other materials used in construction. The manufacturers had reduced production because of the Coronavirus and then encountered a series of problems that, combined, have created a global shortage of products. One plant had a fire in their reactor which has temporarily taken it out of production, another closed due to an earthquake, storms closed a further plant in the US and lower raw material stock supplies have created even more problems. The material shortage has been exasperated by shipping containers being held up offshore so stocks expected in the UK have not arrived. With a classic supply and demand market we have seen the cost of all plastics increase dramatically.


Insulation Materials


PIR insulation, the insulated foam boards, are made of polyisocyanurate. As with the supply of plastics some of the core materials used for construction have increased in price by a considerable amount. PIR can be double the price compared to a year ago.


Roof Tiles


The construction industry has a supply issue with roof tiles. The demand has out paced the manufacturing process. This means that roof tiles are difficult to get hold of – and that the prices have increased.


I hope that helps explain the increases in the materials, at Timberwolf Construction we will work with you to deliver your project to the very highest standards, at a competitive price.


Please remember to provide an accurate price for an project that needs planning approval you will need to provide architects drawings that have all structural specifications.