As has been well-known in the industry for some time and is also now being picked up by the mainstream media, UK construction is currently under considerable pressure due to global shortages of key materials. The combination of a worldwide surge in demand for essential materials, as existing projects are revived and new projects are greenlit following the uncertainty of the pandemic, compounded with many other factors such as Brexit, congested transport routes, rises in shipping costs, labour shortages (particularly in the haulage sector) and even climate change have meant that UK builders are especially exposed. Key materials, including bagged cement, Scandinavian timber, steel and aluminium have all been affected and there does not appear to be any chance of relief, at least in the short-term.
Consequently, it is important that employers and contractors agree how to mitigate the risk to their projects of increased costs and delays as developments compete for a finite number of resources. Traditionally, employers would usually expect to pass the risk of obtaining materials onto the contractor and, more often than not in our experience, contractors would generally be willing to accept this position. However, we are increasingly seeing contractors becoming more reluctant to contract on this basis due to the uncertainties in the market. Continue reading
