Florence, the largest ever tunnel boring machine used on a UK rail project, at the HS2 site in West Hyde near Rickmansworth, Hertfordshire.
Florence, the largest ever tunnel boring machine used on a UK rail project, at the HS2 site in West Hyde near Rickmansworth, Hertfordshire. Photograph: Steve Parsons/PA

A ‘perfect storm’ has hit UK builders as they struggle to get hold of material and labour. warns Jan Crosby, head of infrastructure, building and construction at KPMG UK.

The industry is telling us that this is one of their biggest concerns right now, and that supply chain delays are preventing them from taking on new work to grow their construction businesses at a time when the economy is bouncing back.

Global demand for materials, the HS2 high-speed rail project, the shortage of lorry drivers, and the loss of some EU workers after Brexit are all shaking up supply chains, making it harder for construction firms meet demand.

Crosby explains:

“The scale of HS2 is acting as a magnet for certain elements of the supply chain, including heavy equipment and cement; the global demand for steel and timber is pushing up prices and lead times for most goods can take much longer than normal. Additionally, labour in the south has been impacted by Brexit and HGV drivers are in high demand.

“The good news is that demand remains high across most markets – particularly residential and infrastructure. Rising end prices for houses and real estate are often fully mitigating the impact of the cost increases – at least in the private sector. However, availability will act as a break on how much the industry can respond to the high demand.

“This month has again seen slow growth for the sector. The ongoing lorry driver shortages and lack of stock mean these supply vs demand worries aren’t going away quickly.


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