CALLS FOR GOVERNMENT TO SHARE THE BURDEN OF PRICE INCREASES

Ken Parkin, Chair at Construction Alliance North East and Matthew Wharton, Director at Wharton Construction

Recently, there has been major economic changes that are impacting the World. As a result of the COVID-19 pandemic and Brexit, combined with the ongoing crisis between Russia and Ukraine, we are currently seeing cost-of-living price increases, national insurance increases as well as unprecedented change in the level of volatility in commodity and energy prices.

British Steel will increase the prices of Structural Sections for all new orders by £250/t, with immediate effect. For Construction Alliance North East’s (CAN) regional SME members, this represents almost a 10% overnight cost increase. The impact on the construction industry is enormous. CAN’s regional SME members have been impacted greatly, for example on two relatively small projects this resulted in an immediate cost increase of circa £20,000 per project and the member company is currently unable to pass this on to clients due to fixed price contracts. 

We are aware that steel and other material costs will continue to rise, and so we are calling on the Government to provide as much support as possible to regional SMEs, as well as for clients, material suppliers and merchants to share the risk with both main and sub-contractors.

CAN, in conjunction with CECA, have arranged a North East Summit to address the wider issue of material price increases and extended delivery periods.

This burden will be felt throughout the construction industry, and so we want to make sure we are able to maintain high levels of activity, regardless. We would also like to thank our members for their ongoing support in such turbulent times.

Construction Alliance North East