The price of construction materials is continuing to fall, according to the latest government figures – but there are still concerns over “critical shortages” in key areas.
In the latest figures from the Department for Business and Trade, the material-price index for all construction work fell by 1.8 per cent overall in September this year, compared with the same month in 2022.
This followed a decrease of 2.3 per cent in August 2023 compared with August the previous year.
The September decline included a drop of 1.7 per cent for materials used in repair and maintenance, while prices for those in new housing rose by 1.2 per cent.
The largest price increases in the 12 months to September 2023 were for metal doors and windows (19.0 per cent), screws (14.8 per cent) and ready-mixed concrete (14.4 per cent).
Meanwhile, the biggest decreases were in concrete reinforcing bars (-29.0 per cent), fabricated structural steel (-28.4 per cent) and imported sawn or planed wood (-16.7 per cent).
In the same period, brick deliveries fell by 32.8 per cent, and deliveries of concrete blocks by 19.5 per cent.
Aldermore Bank head of specialist equipment Chris Smith said the construction industry was “continuing to bear the brunt of economic challenges” and that despite another month of declining material prices, “we face critical shortages in key materials like bricks and concrete blocks”.
“These shortages are causing project delays and contributing to a decline in industry output and the pursuit of new opportunities,” added Smith. “Some larger projects, such as HS2, are also using up available materials, and furthermore new machinery retailers are experiencing a slowdown in machinery sales as the market starts to slow off the back of material availability.”
He added that it was “hard to predict” whether the current decline in prices would continue, given current market volatility.
Smith pointed to inflation, the rising cost of living, and increased interest rates as factors likely to have an impact on material demand, as well as labour shortages and rising wages.
“Yet, the industry as a whole is feeling positive, despite pockets of decline in certain sectors,” he said. “The industry plays a vital role to the UK’s economy, so it’s important construction businesses can be empowered at this time to optimise their financial resources and grow sensibly so that they can continue to deliver projects despite the challenges against them.”