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Growth Continues but Cost Pressures Mount

Inflation can be seen throughout the supply chain, starting with manufacturers’ input prices, and is particularly acute for energy-intensive heavy side firms, whilst data from BEIS has shown year-on-year increases of over 20% in construction products and materials prices since August 2021. It is, therefore, no surprise that materials were the key driver of SME builders’ costs in Q1.

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Construction set for growth despite potential supply issues, says CPA

In its latest quarterly forecast, The Construction Products Association (CPA) forecasts that output in the industry will grow by a robust 4.3% in 2022, slowing to 2.5% in 2023 compared to the 13.3% seen in 2021. This demonstrates the remarkable resilience of the sector to the initial Covid-19 lockdown and the end of the Brexit transition period in 2020.

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Cost Pressures Intensified for Construction Products Manufacturers in Q3

The construction products manufacturing sector expanded for a fifth consecutive quarter in 2021 Q3, according to the latest Construction Products Association’s State of Trade Survey. This is despite escalating cost pressures and ongoing issues on the supply side that have been further exacerbated by a shortage of HGV drivers and disruption at major ports.

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Strong Construction Demand but Supply Hit by Perfect Storm

The Construction Products Association (CPA) has revised construction output growth up for 2021 from 13.7% to 14.3% since its previous Forecasts, but also revised down growth for 2022 from 6.3% to 4.8% in 2022. With more buoyant demand so far in 2021, supply chain constraints are expected to hinder growth over the remainder of the year and into 2022.

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