The cycle of the roller coaster ride for the construction industry continues as the Financial Times reports that bricklayers’ pay has jumped 20% in the last six months as the increase in house building has created labour and material shortages – delivery times for bricks, roof tiles and lightweight blocks can now be eight weeks plus. Brendan Sharkey, Head of MHA MacIntyre Hudson’s Property and Construction Group, looks at the consequences.
Although house builders may be able to pass these costs on (particularly in the south east), increases in the price of materials and their scarcity is a UK resources issue and may restrict development elsewhere.
The labour and materials costs for non-residential developments will be affected and this will hurt the refurbishment market where prices may have been fixed some time ago.
We have noticed that our general contractor clients’ margins are being squeezed and it will take time before their clients accept the increased prices. To meet demand, labour and materials import will go up and which in turn will not necessarily help the UK economy.
In addition, the number of surveyors has been in steady decline and there is currently insufficient numbers to deal with the growing residential demand, so we expect to see a recruitment drive in this area, along with estate agents.
However, how long does this upward trend continue (based on changes in government policy post election) before the roller coaster has another dip?