Timber and building industries hit by price increases and limited supply

The timber and building industries are continuing to face price increases, we take a look how things stand in July 2021. 

Back in January 2021 we looked at the industry concerns regarding forthcoming price increases and a worrying prediction of a decrease in stock availability across the UK. Here we take another look at what the effect has been so far and what may be impacted in the near future. 

Where are we now?

At the beginning of July 2021 the Construction News reported that statistics shared by the Department for Business, Energy and Industrial Strategy (BEIS) show that timber prices have been continuously increasing since May 2020. For example, the price of planed or sawn timber increased 3% from April – May, and imported plywood increased 4% in May in addition to a 12% increase in April. Imported plywood in May 2021 was over 29% more expensive than it was in May 2020.

What else has seen an impact?

Not only is timber experiencing steadily rising prices, the same can be seen across the wider industry. The cost of prefabricated steel has increased by 38% in comparison to the same time last year, and concrete rebar is 43% higher in price than the previous year.

Despite significant increases in the cost of timber and building materials, demand has remained strong while supply has dwindled. Brexit complications slowing supply from the EU, and a decrease in production impacted by the Coronavirus pandemic, has affected the volume of building supplies available to the UK market, from timber and steel, to cement and insulation, even down to screws and silicones.

What does the future hold?

An increase in demand and decrease in supply availability, plus a longer lead time on the delivery of products that are available, is likely to have a negative impact on small / medium construction businesses, self-builders and DIYers.

The trends seen over the last 12 months strongly suggest that prices will continue to rise as we progress through 2021. With continued uncertainty surrounding the Coronavirus pandemic and the discovery of new strains of the virus, it unfortunately remains unclear how exactly the construction industry will be affected in the months ahead.