Are Construction Costs Stabilising?

are-construction-costs-stabilising - Maguire Brothers

With interest rates rising for the 14th-consecutive time, the UK is on track to hold the (unwanted) title of the worst performing of all major world economies this year. There are, of course, many factors which feed in to this – the obvious being the tumultuous events of recent times, which have led to great economic uncertainty, impacting countless industries, with perhaps construction and infrastructure one of the more heavily affected.

Perhaps the most pressing concern for construction professionals and contractors has been the spiralling cost of materials, as well as their resultant scarcity. This, in turn, has directly affected the viability of many construction and infrastructure projects throughout the country. With prices seemingly rising daily in 2022, peaking in around June, we look at whether material prices, and indeed general construction costs thus far in 2023, have followed this trajectory.

Of course, being such a varied industry with countless disciplines, the cost of materials for one trade are often vastly different to another, and therefore material inflation may have a different impact dependent on whom you speak with.

Certainly within the last few months, material costs seem to be relatively stable. However, despite this stabilisation, prices are still high, remaining close to their all-time peak. Whilst this is pleasing to see, we are all aware that inflation is still rife and, as we have seen over the last few years, the potential for yet another ‘one-off’ event is ever-looming, ready to send shockwaves throughout the industry and economy at large. Therefore, despite relative positivity, our industry is still beholden to the economic whims of the day.

Material cost is only one element of a project, of course, and it is therefore necessary to consider rising labour costs (due to the well-documented skills shortage) and the resultant higher wages, as well as the many other factors of the day such as the (even more well-documented) cost of energy. Indeed, the skills shortage is said by some to be an even greater challenge to the industry than material costs.

Overall, although it is positive that we are seeing both material and general construction costs remain relatively stable over the last few months, we must be prudent that, if the events of the last 3 years are anything to go by, stability can be short lived.

This article, as with all other articles we produce, is for guidance purposes only. It does not constitute formal advice and should not be relied upon as such. For bespoke, unbiased advice relating to your commercial roofing project please contact us and we would be pleased to assist.

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