The construction sector is experiencing levels of demand which have not been seen for years. However, materials costs are rising sharply and delivery lead times are lengthening rapidly.
This combination of factors is in danger of turning the current boom into a very serious headache for many in the construction sector. Can contractors deliver under existing fixed-price contracts? Will developers decide to hold back their next schemes, in order to wait for this situation to calm down?
The IHS Markit/CIPS UK Construction PMI Total Activity Index for the month found that output was at its strongest level since September 2014, although input cost inflation was also at a record high, reflecting a surge in demand for construction materials and “severe” supply shortages.