Business Support

Shortage of materials set to continue into 2022

Adjustment to working practices enabled the landscape and construction industries to avoid the worst effects of the COVID-19 pandemic, which witnessed many other industries temporarily close. However, one of the indirect consequences of the pandemic has been a shortage of construction materials leading to disrupted landscape and construction projects - a wider trend predicted to continue for the foreseeable future. The Association’s Technical Officer Owen Baker takes a closer look at the challenges and what we may expect to see in 2022 and beyond.

Shortage of materials in the landscape industry is not a new concept. During the spring of 2021 the Association reported on a shortage of trees and shrubs in the industry, following numerous reports from members. There was no single reason for this shortage. When questioned, suppliers cited several reasons ranging from the pandemic to historic factors including the recession in 2008 and the perennial issue of staff shortages.

As with plants and plant materials, the reasons for shortages and delays were various:

Shortage of supply

Construction materials sourced from Europe and the rest of the world have been in short supply due to closures of factories - forced to shut down during the height of the pandemic. More recent COVID-19 outbreaks in Asian countries have reduced the speed of recovery across several industries, including construction materials and components.

Unprecedented demand for products

Domestic demand for construction materials has been unprecedented from within all categories of the construction industry, but particularly domestic repair, maintenance, and improvement since the beginning of the pandemic until summer 2021.

Whilst demand from domestic projects has declined slightly more recently, commercial construction and housebuilding remains high, with strong projections based on the anticipated pipeline of work for the rest of 2021 and into 2022.

Global demand for construction products is also at an all-time-high which means there is significant competition amongst countries for the same item, particularly where single countries are relied on globally for specific products.

Global logistics

Logistical issues continue to be the most common and pressing concern across the global supply chain. Whilst 2021 has seen record numbers of shipping containers ordered to satisfy demand, there remains a significant shortage. Fewer cargo ships operated during the pandemic, resulting in fewer empty containers being returned. In addition, there was an increase to the number of empty containers being stranded in countries subject to restrictions, however this issue looks set to improve in early 2022.

Unfortunately, the cost of available containers has increased significantly; the cost of importing shipping containers from China to the UK has risen by up to 800%.

UK container ports such as Felixstowe have struggled to process the backlog of goods being brought into the UK, with congestion reported for several months. Importers have either deposited cargo at European ports and transported stock to the UK by road, which has added to delivery times, or been subject to charges caused by congestion at the ports.

Shortage of drivers in the UK

As demonstrated during the public’s panic-buying of fuel in autumn 2021, a shortage of Heavy Goods Vehicle (HGV) drivers has impacted each sector. For many, this factor is seen as the main contributor to delayed deliveries in all construction product areas in the UK. Whilst the government have responded with initiatives such as driver training, it remains to be seen whether these are sufficient to resolve the shortfall of drivers.

Cost increases

Unfortunately, the shortage of materials has also driven up costs. Earlier this year the Department for Business, Energy and Industrial Strategy (BEIS) reported the average material costs across the construction sector were 23.5% higher in August 2021 than in August 2020. This statistic does not tell the true extent of the price increases for some materials. The cost of imported sawn or planed wood for example was 74% higher in August 2021 than in 2020, with steel suffering similar fluctuations in price.

A 15% price increase has been suggested during the next five years

The future of construction material availability – and cost

Construction industry commentators have predicted inflated material prices is likely to persist Commentators have also suggested shortages of construction materials will remain throughout 2022.

This forecast reflects those within the landscape industry, who warned of similar challenges around the availability of plants and plant materials earlier this year. Suppliers within the landscape industry suggest specifiers and contractors placed orders for materials and products earlier than in previous years, and to allow for longer lead times.

As demonstrated by the fuel availability issues in autumn 2021, even established supply chains that have traditionally offered extraordinary levels of flexibility (same day time slots, borderless transport routes) are easily disrupted by fluctuations in demand or supply.

Supply chain issues are regarded to be of greater significance than materials availability in 2022, which is endangering the wider construction industry’s recovery and with it the economic recovery of many nations worldwide.

The landscape industry should expect continued shortages of materials throughout 2022 and members may wish to consider the following measures:

• Speak to suppliers as early as possible, ask what their lead times are for materials you are likely to need.

Order materials early – subject to exposure to inflated prices

• Explain the situation to your clients; manage their expectations in relation to product availability, cost and the possibility of delayed project start/ finish times

• Suggest alternative materials to clients

• Exercise caution if pricing future projects or responding to tenders; the price of materials is likely to fluctuate for the foreseeable future

For further technical advice and support visit bali.org.uk/

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Owen Baker - Technical Officer (Policy & Research)