There appears to be mounting fear in the UK construction industry about the impact of the weak pound on building costs, reports The Construction Index on 2 August 2016.
The Federation of Master Builders (FMB) is warning that the problem of rising construction materials prices could be exacerbated by a weakening currency following the EU referendum result and in the latest state of trade survey for Q2 2016, two-thirds of construction SME bosses predict material price inflation.
FMB chief executive Brian Berry said: “Following the EU referendum, the plummeting value of sterling has further complicated an already difficult situation for small construction firms. Even prior to the referendum result, nearly two in three bosses were anticipating rising material costs, on which there has been intense pressure over the past couple of years, as demand for projects has picked up again. With the dramatic fall in currency value however, we’re concerned that the trend towards price inflation will gather pace.
“We’ve already heard accounts of timber and brick costs rising, and a number of sources have said that even steel prices have risen by 8% since the decision was made to leave the EU. The UK construction industry is heavily reliant on imported products and materials so this situation is very concerning indeed.
Government needs to get Britain building again
Berry concluded: “It’s important to note that this survey was conducted prior to the referendum and shows that SMEs were consolidating their recovery, with demand in the private sector continuing to pick up. If this wavers, as suggested by recent ONS stats showing that the construction sector is now in recession, then the government must do everything in its power to reverse this situation and get Britain building again
A significant programme of publicly-funded capital investment in crucial areas such as housing and infrastructure, along with a renewed focus on improving public procurement processes for SMEs so that they can benefit from these opportunities, would be enough to hush any whispers of a post-referendum recession.”
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