Supply Chain Issues Caused By The Pandemic
20 June 2022
Looking at raw material prices nowadays is enough to start giving anyone heart palpitations but after the last two years, when it seemed everyone was running to the nearest B&Q three times a week, can we really say we didn’t see this coming?
Ever since the start of the COVID-19 pandemic, both businesses, as well as individuals, have had to deal with product shortages and the subsequent price surges that come with living in an endless capitalistic cycle, and just when everyone thought they were starting to see a mirage of an end to this nightmare, Russia’s latest ‘special military operation’ tore our hopes to shreds.
But let’s not get ahead of ourselves – first, let’s explore just how it was that a global pandemic shot timber prices (among so many others) through the roof.
DIY-ing our way through a global pandemic
At some point in the hellish months we were all stuck inside for, it seemed like all around the globe a bunch of light bulbs turned on at exactly the same moment and suddenly everyone was desperate to fill their days with home-improvement projects.
And who could blame us? If we had to be locked up at home, we may as well make it a nice one – especially considering how much the price of new houses rose during the last two years.
However, everyone’s desire for the ultimate garden shed and newly fitted bathrooms came at an almost unprecedented cost. According to the Royal Institution of Chartered Surveyors’ analysis, the price of raw materials increased fivefold during the pandemic to 4.8% in 2021, a 40-year high.
Looking at specific materials, the BCIS Materials Cost Index concluded that steel and timber showed the most significant increases between January and September 2021. Across all material categories, though, prices have remained increasingly volatile and BCIS lead consultant Joe Martin expects “the pressure on materials prices and availability […] to continue at least until the end of 2022.”
Of course, it wasn’t just the DIY-ers up and down the country that brought this price surge on, though. Coupled with all the logistical issues that the world was suddenly faced with – like having half the workforce at home in isolation – the delays, product shortages and price increases were nearly inevitable.
Brexit – the cherry on top
The UK was and continues to be, particularly affected by these market shifts. Still reeling from Brexit, the nation is now not only trying to find its way around supply challenges, but also dealing with the human resources side of the trade and the lack of labour availability.
Though the country released a huge sigh of relief when Boris Johnson announced in December 2020 that a trade agreement had been reached with the EU, with the intention of facilitating interrupted trade, the last year and a half has definitely not been smooth sailing.
From 1st January 2021, the UK has had a new global immigration system, which requires employers to register as sponsors in order to recruit from abroad. However, to employ someone from outside of the UK, the individual must meet job, salary and language requirements, criteria which puts added pressure on both the employer and employee.
So, with demand far outweighing the supply of both workers and materials from the EU, the UK construction industry finds itself in a complicated predicament: though the market is pushing for more projects in development, the conditions are simply not there.
Delivery delays, reduced workforces, and unavailable equipment are all keeping the industry grounded, but PAL Hire is here to fix that for you. Forget sourcing your own equipment and save yourself endless hours spent on the phone – with PAL Hire, you have access to the UK’s largest network of equipment hire depots, meaning that every single item you need, we can find.
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