London: Government data released today (5 July) reveals that the cost of construction materials is still on the rise, surpassing the levels seen a year ago.
According to the monthly statistics published by the Department for Business and Trade, the material price index for all construction work in May 2023 was 1.5 percent higher compared to May of the previous year. This increase includes a 4.5 percent rise in materials costs for new housing and a 1.2 percent increase for repair and maintenance work.
Using May 2015 as a baseline of 100, the price index for all construction work reached 155.6 in May 2023, marking a 1.1 percent increase from April’s figure of 153.4. However, this index, which is a weighted average of producer price indices, remains slightly lower than its peak of 156.3 in July of the previous year.
The greatest annual price hikes were observed in insulating materials (29 percent), ready-mixed concrete (19 percent), and screws (33 percent). Conversely, prices for imported sawn or planed wood, concrete reinforcing bars, and fabricated structural steel fell by approximately 25 percent over the past year.
The data also indicates a slowdown in construction activity. Brick deliveries witnessed a 30 percent annual decrease in the year leading up to May 2023, while concrete block deliveries fell by 20 percent.
The escalating costs of materials, as well as energy and labor expenses, are contributing to a decline in construction work. Industry analyst Glenigan recently predicted that it would take the sector more than two years to recover from this setback.
Earlier this year, the Mineral Products Association (MPA) cautioned that the lack of reform in supplier regulations was creating a challenging environment for private investment in material extraction. Robert McIlveen, the MPA director of public affairs, highlighted the potential consequences of failing to address these issues, which could lead to increased costs and complexity in delivering housing, infrastructure, and the necessary investments for achieving net-zero targets.
