Labour and Product Shortages putting Pressure on Construction Industry

This month has been a tale of two halves. With merchant’s value sales up 79.6% in May 2021 compared to May 2020 according to the BMBI report, & plumbing & heating sales doubling in May, sales and demand in the sector is certainly looking positive.

We have recruited into the Construction Supplies Sector for over 15 years, and right now we are seeing unprecedented demand for talent and people looking for new roles. It’s an exciting time for the sector and people looking to advance in their careers.

However, labour and product shortages are putting pressure on the construction industry. With the unprecedented demand for building products which has been reported throughout the year and now a lack of labour, partly due to employees having to self-isolate when being ‘pinged’ by the NHS test and trace app, is a rising concern.

John Newcomb, CEO, Builders Merchant Federation commented in the Builders Merchant News

“The basic trends of the last six months remain, with global demand far more than supply leading to product shortages, rapid and sustained price inflation, long lead times and uncertainty regarding deliveries. It is also clear that the global shipping industry is far from recovered from the disruption caused by the coronavirus pandemic, with congested shipping routes, container cancellations and higher costs still evident.

The products most affected are those used in housebuilding and domestic repair maintenance and improvement, including roofing products, timber, insulation, landscaping products, blocks, sealants/PVA, PIR Insulation, kitchen carcassing and products that use plastic, for example drainage, some windows and bagged cement.”

Newcomb added: “The supply chain is extremely stretched on all fronts but our members are pulling out the stops to keep supplies in branches and deliveries out to customers in very challenging circumstances.”

With the expectation supply shortages will continue due to the on-going uncertainty, the other pressure on businesses is the labour shortage exasperated by the ‘pingdemic’

Frank Elkins, Group Chief Operating Officer for Travis Perkins, said “We are disappointed that our colleagues have not been included on the list of workers that can be made exempt from full self-isolation if they are alerted by NHS test and trace.

“Having worked hard to put in place measures that safeguard our staff while they have played such a vital role in helping to maintain essential services that are so crucial to keeping us all dry, warm, safe and secure, we urge the Government to look again at the broader construction supply chain and its importance to the country at large.”

In addition Martyn Coffey, Chief Executive Officer for Marshalls, said: “After the challenges in 2020, no one could have accurately predicted the shape of demand in 2021. This demand continues to grow and the effects of Covid the ‘self-isolation’ practices are now beginning to bite within the Marshalls business.

“Health and Safety has always been our number one consideration throughout this pandemic. We have gone above and beyond government guidelines to keep our people safe.”

Businesses reported that on average 15% of their workforce were pinged last week and had to self-isolate leaving business leaders with an inability to plan for cover for these workers. A sector already pained by labour shortages, business leaders are seriously pushing for the Construction and Building Supplies sectors to be deemed ‘essential’ so double vaccinated workers who are ‘pinged’ by the NHS Test and Trace app won’t need to self-isolate. Hopefully, the changes to the isolation rules this month but improve the labour shortages.