essential materials sustainable solutions
FROM THE DESK OF: GORDON BEST, REGIONAL DIRECTOR, MPANI
CONFRONTING CHALLENGES ON ALL FRONTS
Gordon Best, MPANI
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The recent Ulster Bank PMI survey revealed again an all too familiar story, with inflationary pressures and lengthening supplier delivery times. Within the UK, Northern Ireland continues to report the steepest rises in input costs, with local firms raising the prices of their goods and services at faster rates than any other region.
In January 2021 the Carbon price sat at around £35 per tonne, At the end of September its sitting at £65. Expectation is that it could rise to £100 per tonne by June 2022.
Price pressures linked to raw materials, fuel, freight, wages and Brexit continued to be cited by survey respondents. So why is this unprecedented increase in material costs and shortages happening and when is it likely to end from?
60% of UK Natural Gas is imported.
PLANT & CIVIL ENGINEER
Impact of red diesel changes from April 2022 will see doubling in price.
The cost of shipping a container from China to Europe has risen from £1,500 to almost £14,000 since January 2021.
All of the above feeds into the construction supply chain and will continue to make the cost of supply of cement, bitumen, aggregates, admixtures, pigments and transport extremely volatile.
Wholesale prices for gas has risen 250% since January and 70% since the start of August.
UK IMPACT
Oil is up from $40/barrel this time last year to $74/barrel, + 85%, and set to remain at $70+ to year end. Gas Oil linked to oil is up over 40% since same time last year. Furthermore,
The construction materials shortage can, in part, be traced back to increased building and home improvement activity in 2020, particularly during the first lockdown. This led to a slowdown in the production of materials from some factories in the EU, and supply chains have remained stretched ever since.
