The State of Supply Chains in Construction

The State of Supply Chains in Construction

The global construction industry is going through major shortages of materials since the pandemic started last year. This situation has been further complicated by a number of reasons including labour shortages, natural disasters, manufacturing and production setbacks and political instability. This has led to major cost overruns, delays, and frustration for many in the industry. At the beginning of the pandemic, when construction was deemed essential, many of the companies in the construction material supply chain were deemed nonessential. This further added to the shortages and put strain on the supply chain.

Supply Chains in the UK

The construction industry in the UK has also been facing several challenges and delays with regard to supply chains. In addition to the supply chain shortages, there is also a growing lack of labour in the country. These shortages have led to delays in the industry and price inflation. September saw a slowdown in the recovery of the construction industry. The PMI (Purchasing Managers’ Index) survey found that output growth eased while sub-contractor charges increased, and supply shortages caused rapid cost inflation in the industry.

According to new data released by the Construction Products Association (CPA), the revised construction output growth is expected to be 4.8% as opposed to 6.3% that was predicted earlier. Supply chain constraints are expected to be the major reason for this well into 2022. Skills shortages, HGV driver shortages, cost inflation, the impacts of energy cost rises, and delays at ports are additional reasons fuelling this slow output growth for 2022.

Overcoming Material Shortages

It is clear that these material shortages are here to stay well into 2022 and construction companies need to think of innovative solutions to combat this issue. One way is to create adaptable designs so that materials can be substituted to reduce costs and delays. Companies should also start forward planning as this will get them priority. It is not the current norm in the industry to plan ahead, but given the current shortages, advance planning should help reduce the delays and limit cost increases. Prior planning can also help companies identify substitute suppliers and materials and help them prepare for future risks.

Companies can also look at switching to modern methods of construction (MMC) as these can help prevent delays and cap unexpected costs. These can be especially beneficial when it comes to dealing with the skills shortage in the industry as MMC helps substantially to reduce the number of labourers required onsite.

MyDek Overcoming Constraints

MyDek offers a range of high-quality non-combustible decking solutions made from recyclable aluminium. We can leverage our diverse supply chain to help overcome constraints caused by material shortages. By engaging with us early in the design and build process, pre-book material, schedule production and even produce and stock well in advance of when the product is needed on site. These are all important factors that can help speed up a project.

Additionally, our cut-to-length service means MyDek can help further increase speed by delivering deck boards cut to exactly the correct length. This reduces labour and waste and means that you only pay the material you need.

Forecast for Supply Chains

While the construction sector output is expected to grow in the coming year, the supply chain issues are predicted to be around longer. Demand in the industry will be strong, but the supply issues will hinder growth in the medium-term. The biggest impact of these shortages will be on smaller construction firms as they focus on flexibility and less on demand. They also are often not able to plan ahead so much in advance due to lack of visibility of the overall construction programme. This puts them at a disadvantage and leaves them more exposed to cost inflation and issues with cash flow in the business. Increased collaboration by all stakeholders in the construction project will enable everyone to succeed, reduing stress and pressure on the supply chain and the labour force.