Coronavirus latest: UK builders face rising costs as materials and labour in short supply

Material and staff costs for UK builders “went through the roof” in August as supply chain disruption and labour and materials shortages pushed up prices and wages, according to a closely watched survey.

Input cost inflation accelerated to the second fastest rate since the IHS Markit/CIPS Construction survey began in 1997, surpassed only by the record rise in June.

“Material and staff costs went through the roof,” said Duncan Brock, group director at the Chartered Institute of Procurement & Supply, who noted that more than eight in ten supply chain managers reported paying more for their purchases.

Businesses noted severe shortages of building materials, a lack of available transport capacity and long wait times for items from abroad due to port congestion.

As a result, the headline IHS Markit/CIPS UK Construction PMI total activity index, a measure of the health of the sector, declined more than expected to 55.2 in August, down from 58.7 in the previous month.

The figure, which was weaker than the 56.9 forecast by economists polled by Reuters, was the lowest since February. Growth in new business eased to a five-month low.

Usamah Bhatti, Economist at IHS Markit, which compiles the survey said that the survey shows “evidence that the UK construction sector began to feel the impact of ongoing supply chain disruption.”