The rising price of building materials is placing small builders under pressure, says FMB.
A third of small building firms say that soaring material prices are squeezing their margins and almost a quarter have had to pass these price increases onto consumers, according to the latest research by the Federation of Master Builders (FMB).
Construction SMEs have reported a range of material price increases since the depreciation of sterling following the EU referendum in June 2016. The FMB asked small building firms which materials have increased the most with timber, insulation and bricks coming out on top.
Brian Berry, Chief Executive of the FMB, said: “Material price increases have left builders under severe pressure. This research shows that following the fall in the exchange rate, timber is the material that the majority of builders say has increased most in price but the problem doesn’t end there – everything from insulation to windows to bricks and blocks are soaring in price.”
The full list was as follows:
6) Plasterboard / Slate (joint sixth)
7) Boilers and radiators
8) Porcelain products
The FMB believes that the impact of these material price increases have been wide-ranging. According to its survey 85% of builders think material price rises could drive consumers to hire rogue traders in an effort to save money on their building projects, while one third of construction SMEs (32%) have had their margins squeezed. It also showed that almost one quarter (22%) have been forced to pass material price increases onto their clients, making projects more expensive for consumers. More than one-in-ten builders report making losses on their building projects due to material price increases.
Brian Berry continued: “A third of builders report that these price increases are eating into their already razor-thin margins – and this on top of increased wages and salaries stemming from long-term construction skills shortages. Furthermore, one-in-ten builders say that they’ve actually made losses on projects due to material price increases – this is most likely to happen when a particular product or material jumps up in price mid-project when then builder has already quoted for the work.”