The UK is currently facing a difficult time with the ongoing cost of living crisis hitting both businesses and individuals hard. This is due to rise in interest rates as well as inflation causing price rises for goods in all sectors and unfortunately, the construction industry hasn’t evaded this either.
As we approach 2023, the future of construction is looking rather bleak with project prices expected to continue rising. Whilst inflation rates and interest rates will play their part in this, the main cause is a material shortage. Some of the resources that are low in stock everywhere include:
- Bricks
- Steel
- Paints
- Electrical products
This creates new challenges for businesses to navigate as they try to steer their business clear during these hard times. However, with careful planning and a proactive mindset, construction businesses can make changes to mitigate some of the rising costs and keep their business afloat in 2023. Read on to find out how you can do that.
The prices of building materials
There has been a 24.1% increase in material prices compared to one year prior according to data collected in August 2022. This is a huge increase which is making turning a profit even harder for construction businesses.
The shortage of materials, inflation, energy price rises and war in Ukraine are all factors which have taken the prices of construction materials up. Many of these reasons don’t appear to be going away any time soon, so the construction industry must adapt now.
What can construction businesses do about this?
If rising prices and material shortages are affecting your business, then here are the easiest ways to ensure you keep costs and downtime to a minimum.
Plan ahead
Get organised and order your materials early to ensure they’re delivered on time and at a desirable price. Be sure to stay in close contact with suppliers for regular updates on your order.
Research
The internet is a great place to research the best prices for materials for your project. Find the suppliers that offer the best rates and place an order. You may also benefit from ordering in bulk for better prices too.
Maintain construction compliance
With material costs taking up most of your budget now, you don’t want to be spending money unnecessarily. That’s why you should think about taking out construction insurance which could cover your business and maintain strict health and safety standards on site, so you are not leaving your business completely exposed to accidents.
The future is looking to be a costly one for businesses in all industries but in particular the construction sector. Having said all this, the construction sector will still be a vital part of the economy and one can expect demand for insulation and home improvements to still be high. Take the steps we’ve mentioned above to ensure your business isn’t at risk in 2023.
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