Supply Issues and Shortages In The Construction Industry

[albaPhenom]

Pretty sure most of you have encountered serious issues regarding shortages recently.

The industry is approaching crisis point IMO. I work in the Commercial and Industrial sector and our materials from the biggest suppliers we use generally have a 2-3 week lead-in from point of order, delivery of cutting lines.

At the moment we are being advised that orders placed NOW, will have an earliest delivery date of October and everything is on a first come first basis atm. In other words, if I don't have an order to place in the next few weeks, with everyone jumping in to order theirs, then I shouldn't expect to get a hold of materials from these suppliers any time this year.

That is absolutely disastrous... what's worse is you can't explain this to clients and have them get it into their skull... they'll still take an age to move things through the process, the Main Contractor QS's will still leave orders to the last minute as they hawk the project around trying to get the cheapest possible price and then they will expect us to take these material price hikes on the chin.

That's before I get on to the drastic increases in prices which has already happened and anticipated on a near monthly basis for the rest of the year.

This is by no means a UK based thing either... I watched a YT video from Renovision who was talking about his local plasterboard stockist, who normally boasts of having 1000 boards in stock at all time, having 2nr damaged boards available.

What have you been experiencing and what do you think about the situation?

 

[gasbanni]

Surely it's to be expected after the biggest pandemic in living memory.

It's just how it is. Things will eventually get back to normal, but it will take time.

 

[freddiemercurystwin]

A few sites (£1M+) round here have had the odd shortage of this and that in the last few weeks blamed on the Suez Canal debacle.

 

[albaPhenom]

I’m quite surprised at that. I spoke to a guy from a company called Eurobond yesterday who was telling me in the first quarter the company usually turns over between 3-4 million, in the first quarter of this year they’ve turned over 11 million ... which sounds great right?

But the other side of that sword is that TATA simply isn’t able to output the steel required for the current demand and won’t be able to well into 2022.

The project I need that material for is a hospital, the bottom line is if they don’t place the order soon, they can expect to not have their hospital department built this year. Unless they change to a different material which is available.

Outwith the steel market, I thought I’d order 14 mtr of MDF skirting on the internet for a room I’m doing at home.

There was plenty of websites offering it but I noticed that one of the websites had cancelled online orders due to demand and supply issues.

OK, I thought, I’ll go with the other guy ... went to checkout and the earliest delivery slot they had was one day about 2 weeks from now and there was a big disclaimer in red that due to current challenges in the market, that delivery date wasn’t guaranteed.

 

[mattylad]

It's not just construction, its manufacturing too.

I build electrical control panels for gas burners and boilers, we currently have a large boiler waiting to be built - control panel on the skid, just waiting for the boiler that's stuck in a container held up in customs.
I have a row of gas burners waiting for the special UL certified motors that are held up (most likely due to suez).
Numerous jobs are delayed while we wait for parts, many jobs are well overdue.
Apparently 2 weeks ago there wasn't an auxiliary contact for the isolator we use in the country, now I have a big box full.

We cannot even use alternative parts as they are all specified by customers - not that we could get them.

Still, life goes on - there is always something to do even if it's making earth/bond wires lol.

 

[albaPhenom]

Let me share an email I got from one of my suppliers a few days ago.

http://www.belgradeinsulations.com/index.php?p=prices

Note that this is pages and pages of products... this is an almost daily thing at the moment, across the board and it isn't just the Pandemic causing it... there's a confluence of issues which have created a perfect storm.

This was from Kingspan today

"Raw Material Prices

The two influencing factors in the cost of sheet aluminium is the raw material supply with the conversion costs added to this. Both have continued to increase since the start of 2021 with the LME (London Metal Exchange) rates representing the raw material part increasing by 25.3% since January and the conversion part increasing by 31.1% in the same period. The outlook for quarter 3 of 2021 is now forecasting an increase of a further 15-20% with conversion expected to track at similar levels.

The key drivers behind this ongoing period of price and supply uncertainty are largely linked to the following issues being experienced within the global market.

a. Unprecedented demand globally, particularly within the European markets.
b. European aluminium mills exporting significant volumes to US at elevated prices, having a knock-on effect on supply tightness in the European market.
c. Anti-Dumping duties imposed on Chinese aluminium coupled with a very high Shanghai Metal Exchange aluminium commodity price (Chinese version of LME) and inflated freight rates has made Chinese imports uncompetitive against European prices.

Availability and Lead Times

Due to these unprecedented demands throughout Europe impacting raw material prices we are now being advised of extended lead times for the supply of aluminium materials for the second half of 2021 with many European based aluminium mills reporting no further availability until 2022 at the earliest. "

I had to tell a customer today that he had to get back to is client and inform them that their project was now £12.5k more than it was a month ago and there's no way we can absorb these costs for them.

 

[sxturbo]

This is seen in all sectors of industry.

Shortage of supplies on virtually everything, price increases left right and centre.

I've also suffers the customs issues someone else has mentioned. Working life is a bloody struggle at the moment.

The biggest frustration is customers taking an age to make decisions, they shout and scream how urgent they are and how they need the quite asap etc etc, then take 3-4 weeks to place the order, in the meantime lead times and price go up, and then they deliberate for another month, and the cycle goes on.

What annoys me most is that it always becomes my problem there is delays because they took to long to place the order....

 

[ktuludays]

This is seen in all sectors of industry.

Shortage of supplies on virtually everything, price increases left right and centre.

I've also suffers the customs issues someone else has mentioned. Working life is a bloody struggle at the moment.

The biggest frustration is customers taking an age to make decisions, they shout and scream how urgent they are and how they need the quite asap etc etc, then take 3-4 weeks to place the order, in the meantime lead times and price go up, and then they deliberate for another month, and the cycle goes on.

What annoys me most is that it always becomes my problem there is delays because they took to long to place the order....

I feel your pain with slow responding customers. Prices are fluctuating so much at the moment. I can no longer guarantee a quote for the 3 months I normally do and have to explain the current situation to every customer.

 

[sxturbo]

I feel your pain with slow responding customers. Prices are fluctuating so much at the moment. I can no longer guarantee a quote for the 3 months I normally do and have to explain the current situation to every customer.

We are struggling to guarantee the 30 day quite due to the fluctuations

 

[RK_MBD]

Till date our builder has not highlighted if there could be any delay in duration or expected finish date of our extension project which is due to start soon?

Should we talk about it with our builder to confirm if he has ordered material in advance for full project and if he thinks there could be impact on out project timescales due to current situation?

 

[sxturbo]

Till date our builder has not highlighted if there could be any delay in duration or expected finish date of our extension project which is due to start soon?

Should we talk about it with our builder to confirm material order is in advance for full project and what he thinks there could be impact on out project timescales due to current situation?

I would strongly advise it, I'd also confirm with him the materials cost so you don't have an unexpected price increase.



My brother and his wife have just got a remortgage to have a loft conversion and extension, it's been rumblings on for 6 months with planning permission and drawings etc. They have finally got the mortgage approved and I asked how much they got and I was told they got just enough to do the extension.

I said have you spoke to the builder yet due to the price increases... I was told they haven't got a firm price from the builder no itemised quote or anything, my brother and his partner were shocked I was telling them about the shortages and price increases (they live in la la land think they can have their work done in 3 months)

I asked if they have been living in a hole for 6 months.

They've really buggered themselves up and are now running around super stressed trying to get it under their budget and timescale. There original builder has said he can't do it till next year and now they can't find another builder sooner.

 

[just pumps]

Till date our builder has not highlighted if there could be any delay in duration or expected finish date of our extension project which is due to start soon?

Should we talk about it with our builder to confirm if he has ordered material in advance for full project and if he thinks there could be impact on out project timescales due to current situation?

No harm in doing this but choose your words carefully.

 

[RK_MBD]

I would strongly advise it, I'd also confirm with him the materials cost so you don't have an unexpected price increase.



My brother and his wife have just got a remortgage to have a loft conversion and extension, it's been rumblings on for 6 months with planning permission and drawings etc. They have finally got the mortgage approved and I asked how much they got and I was told they got just enough to do the extension.

I said have you spoke to the builder yet due to the price increases... I was told they haven't got a firm price from the builder no itemised quote or anything, my brother and his partner were shocked I was telling them about the shortages and price increases (they live in la la land think they can have their work done in 3 months)

I asked if they have been living in a hole for 6 months.

They've really buggered themselves up and are now running around super stressed trying to get it under their budget and timescale. There original builder has said he can't do it till next year and now they can't find another builder sooner.

Thankyou so much,,,Builder has confirmed that there are no changes to quote but has not said to us anything if there could be delays. I just dont want that he starts works and then we get delayed for unlimited time and failing to get proper communication..

 

[RK_MBD]

No harm in doing this but choose your words carefully.

Thanks,, any suggestion would help

 

[just pumps]

Thanks,, any suggestion would help

I`ve been reading about shortages within the building sector and others causing delays and was wondering if you have experianced any such thing.