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Building material prices soar following Brexit vote

Flickr/ Ran Allen
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Building firms are reporting soaring costs for construction materials since the EU referendum, according to new research by the Federation of Master Builders (FMB)

The research shows that almost a third (32 per cent) of small building firms have reported that price hikes for materials are squeezing their margins as a result of the depreciation of sterling since the vote for Brexit.

Nearly a quarter (22 per cent) said they have had to pass this price increase on to customers. More than one in 10 building companies reported making losses on projects due to the price increases.

Asked which material had suffered the biggest price rise, one fifth of FMB members said timber, 18 per cent said insulation, and 13 per cent said bricks. Just 18 per cent reported that the fall in the pound had had no impact on material prices.

FMB chief executive Brian Berry said: ‘Material price increases have left builders under severe pressure. This research shows that, following the fall in the exchange rate, timber is the material that the majority of builders say has increased most in price. But the problem doesn’t end there – everything from insulation to windows to bricks and blocks are soaring in price.’

He added: ‘Building projects now cost significantly more than they did this time last year.’

Meanwhile the latest CIPS/Markit Construction PMI published on 2 August shows the weakest construction performance since August 2016.

It also shows commercial work has fallen at the fastest pace for 12 months, and new orders have declined.

Commenting on the figures, Mark Robinson, Scape Group chief executive, said: ‘Economic and political uncertainty continues to take its toll, as construction performance last month fell to its lowest in almost a year. The pinch from rocketing material costs continues to be felt right the way through supply chains, and along with a shrinking workforce, it’s no wonder that delivery times are extending.

The pinch from rocketing material costs continues to be felt right the way through supply chains

‘Confidence is crucial, and the government must maintain its resolve and press ahead with big infrastructure and housing projects. Recent announcements from the Department of Transport and Gatwick Airport are positive, but the drop in commercial and housebuilding work in today’s figures is very worrying.’

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