AUG 2022 — Supply issues impacting the market look to be stabilising.

A year on from our first construction supply chain report it’s clear that while supply circumstances are improving, the industry is still facing continued cost increases.

As an example, structural products now have a lead time of eight weeks, down from eleven weeks in January. The industry still has the same constraints, however they have been mitigated through an increase in domestic warehousing, more efficient port operations and domestic freight efficiencies.

Over the last year, sell prices of building products have increased by an average of between 28–33% (category dependant) with structural products showing the largest increases. This latest update shows that there are more cost increases to come. These increases have made it tough going for the industry, and suppliers are certainly feeling the pinch. The full cost increases experienced by suppliers haven’t been passed through to the market, and suppliers are running on low margins at a time when they’re holding far more stock in order to meet market demand.

In July last year we asked suppliers how we should be responding to supply chain issues as an industry. The number one answer was more planning ahead on the part of architects and builders. We know that planning has become more embedded in how industry works, but there is still room to improve given that we’re still seeing delays onsite due to lack of stock or the need to substitute products.

From here, we know that demand is likely to slow in reaction to inflationary pressures, but we will continue to see price increases and the need for thorough forward planning on projects.

View the PDF report to learn more.

Matthew Duder
Managing Director
EBOSS