Construction leaders have urged materials suppliers to provide clearer justification for ongoing and anticipated price increases, warning that a lack of transparency is making it increasingly difficult to manage costs and maintain trust across the supply chain.
In its latest update, the Construction Leadership Council’s Construction Material Supply Chain Group highlighted persistent concerns about how price rises are communicated, stating: “One of the key challenges across the supply chain remains the lack of detailed explanation accompanying price increases, making it difficult to justify and communicate these costs to clients.
“Clearer evidence and transparency would be welcomed, even if the increases themselves are not.”
The group pointed to continued geopolitical instability, particularly the war in the Middle East, as a factor likely to sustain upward pressure on prices for the foreseeable future. This comes despite relatively flat demand, with only concrete plain roof tiles currently identified as being in short supply.
However, while acknowledging that some cost increases are unavoidable, the group suggested that not all rises are being adequately explained. It added: “While there is acceptance that price pressure is justified in some areas, particularly for energy-intensive products (e.g. steel, bricks, concrete, glass, insulation) and petrochemicals (e.g. adhesives, bitumen, PIR, and PVC pipe), increases in other product categories are considered difficult to attribute solely to underlying costs.
“There is no product category that has not shown signs of either current or forthcoming price increases, with pressure recently extending into bathrooms and kitchens, driven respectively by MDF costs for cabinetry and rising overseas logistics and global input costs.
“Increases in raw material costs for metals, including steel, brass, tungsten and copper, were already evident before the Middle East Conflict. Worryingly, further increases are expected, as some imported steel products are facing severe UK tariffs and quotas from 1 July.
“As costs are passed along the supply chain, profit margins are being squeezed at every level. We know, for example, that cost pressures are severely affecting roofing and other specialist subcontractors, who are trying to balance escalating material costs within existing 6-12 month fixed-price agreements, highlighting a significant pressure point within the supply chain.”
The warning underscores growing strain across the construction sector, where contractors and subcontractors alike are grappling with rising input costs while working within fixed contractual frameworks, leaving little room to absorb further increases without eroding already tight margins.
