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The soaring rate of inflation has proved to be a major challenge for almost every industry sector within the UK.
The construction sector in particular has been crippled by inflation rates, leading to increased prices across the board for both customers looking for builders and the tradespeople supporting them. Here we delve deeper into the impact inflation has had on the building industry...
Construction work simply wouldn’t be possible without its workers, with both skilled workers and labourers playing integral roles in projects up and down the country. Inflation however is making available construction workers much more difficult to find.
UK-based construction workers represent an ageing trade, with many retiring in recent years. Age aside, many of the remaining workers have moved elsewhere or into other sectors, pursuing more competitive salaries to counter rising inflation and the cost of living crisis.
The cost of the materials needed to carry out and complete building work has risen rapidly as a result of inflation. The effect has been a significant reduction in profit margins for building professionals and a subsequent rise in the costs of works. The price of materials after all accounts for between 35 and 60% of the overall cost of construction.
The supply chain issues and shortages that have been experienced across the industry since the start of the Ukraine-Russia conflict and further exacerbated by home-based economic problems have also made certain materials harder to come by. This means that the materials that are available have inflated in price.
It’s not just the cost of the materials that is on the up. Getting these materials from A to B has been more difficult in recent years, with many construction companies experiencing delays and long delivery timescales. Transportation issues mean both customers and builders are incurring extra costs, increasing the final price of projects far beyond the initial, proposed cost in most cases.
The availability of building services has of course been negatively impacted by the factors detailed above. As a result, the UK construction sector has shrunk significantly since 2020 and is shrinking further still as recession looms.
Some construction companies have put services on hold, which means they’ve stopped ordering materials or hiring staff, further worsening the issues currently being experienced industry-wide.
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