TIMBER PRICE INCREASES

Dear customer,

Given the current market conditions we know how important it is that you are provided with notice of any significant price changes. We are therefore advising you of some price increases on timber products that you have purchased previously. The below increases will come into effect on August 1st 2021.

Product Category

Imported KD Graded Carcassing Home-grown KD Graded Carcassing - 20%

Imported CLS - 20%
BS5534 Batten - 18%

Type A Batten - 18%

Scaffold Boards - 15%

Machined Softwood - 18%

MDF Mouldings - 18%

Hardwood Plywood - 5%

Constructional Softwood Plywood - 10% 

Chipboard - 15%

MDF - 20%
OSB - 30%

Please note, the above increases do not apply to all products within the categories and only highlight the most relevant price increases. These timber increases are applicable to branches in England and Wales only, prices in Scotland may vary..

Why we’re raising our prices

Unfortunately, the timber market remains very much unchanged. The price of timber is continuing to fluctuate as a result of the ongoing increase in worldwide demand. As we have mentioned previously in these announcements, other markets around the world are willing to pay higher prices for timber products which results in the UK market having to pay more for the reduced amount of supply left available.

To keep up to date with any other price increases and product availability, please visit our dedicated supplier updates page here: www.jewson.co.uk/supplier-updates

If you’d like to talk to us about anything we’ve included within this letter, please get in touch with your local branch. We look forward to continuing to work with you.
Yours Sincerely,
Jewson

Saturday July 3rd 2021 The Times - Louisa Clarence-Smith, James Hurley

“Prices are rising at the drop of a hat, where’s it going to end?” Clive May, owner of Briar-Grove Developments, a small bricklaying business in Mold, north Wales, says that contractors are being quoted prices for timber and steel that are “good for only 24 hours” before they rise again.

“Usually, you’re pricing stuff that’s two or three months out. We are quoting for a job for a Premier League football club that starts a year in August — how on earth are we going to price that?”

Fears of construction company failures are growing as the sector is hit by a shortage of key materials and sharp price rises for material and labour costs.

Rudi Klein, a construction barrister, says the majority of the industry works on the basis of “lump sum bids” — essentially a pledge to do the work for a certain price, come what may. As such, delays to materials and price rises can be disastrous. He cites the example of a mechanical services contractor that priced a job last November based on copper at £4,500 a tonne. When work began in April, the metal had reached £7,500 a tonne. “That’s one hell of an increase to absorb but they were stuck with it and it more than wiped out their profit margin.”

Timber prices have doubled in the past year, according to the Builders Merchants Federation (BMF). One contractor said he was being quoted 35 per cent price increases on steel ties needed for brickwork. Another builder said that the price of steel mesh reinforcement, a basic product, had doubled in the past four months.

Some developers want contractors to commit to fixed prices for projects starting next year, putting all the risk of price rises on to contractors. Small builders say they are worried about the risk of damages claims from main contractors if material delays push back the agreed completion date of a project.

Karl Parker, managing director of Pioneer Design and Build, in Crewe, which works on industrial and commercial developments, said contractors that have agreed material and labour prices in the past three months have already seen prices go up. “If the customers and developers they are working for aren’t able to help them out, then you will see contractors going insolvent,” he said. “The other concern is people will start cutting corners to get paid and then in two or three years’ time when the work becomes defective, there’s going to be a major issue.”

The Construction Leadership Council set up a task force of builders’ merchants, contractors and housebuilders in June 2020 to monitor availability as supply chains were hit by site closures and social distancing.

John Newcomb, chief executive of the BMF, who sits on the task force, said there were issues with specific materials last year, but they were nothing like the shortages builders face now because of the surge in global demand.

“What’s unprecedented in this particular situation is we’ve got availability issues across all the core materials,” he said. “Timber and cement have been the biggest concerns. When a builders’ merchant runs out of cement, it’s pretty much like Sainsbury’s running out of milk. We’ve never had issues in 30 years around cement availability.”

Smaller contractors that aren’t used to bulk buying materials in advance are most at risk, he said. “There are fears about credit levels and the financial viability of some of these businesses.”

The British construction sector expanded in May at its fastest in nearly seven years as the lifting of lockdown restrictions led to a surge in new orders.

However, the pressure on contractors poses a risk to the country’s ability to meet demand for homes, warehouses and regeneration projects. Some developers are slowing programmes because they can’t get materials they need. One contractor said a project he was due to complete at the end of this year has been pushed back to the second quarter of next year as that was the earliest they could get cladding.

Klein, former chief executive of the Specialist Engineering Contractors’ Group, says the industry is busy but companies are scared of taking on work because of the fear “they won’t be able to resource it or if they can, price rises and delays could put them on their backs. If you put in a lump sum bid, and work doesn’t start for a few months, you can find yourself in a very serious situation.”

Andrew Jones, chief executive of Londonmetric, the warehouse developer, said the industrial sector would be able to pass on price increases because of high demand for warehouse space. In offices and retail where supply outstrips demand, the cost is likely to be borne by the developer, which could affect the viability of some projects.

Mark Farmer, chief executive of Cast Consultancy, which advises construction companies, said the high level of demand for materials had come as the supply chain was under pressure from Covid and Brexit-related issues. Insolvency for contractors was “a realistic prospect if things carry on like this”.

John Miesner, head of debt advisory at Interpath Advisory, the restructuring firm, is more optimistic: “The general mood of suppliers of debt capital at the moment is that businesses should be given the leeway to trade through Covid and Brexit-related events.”

Brian Berry, chief executive of the Federation of Master Builders, said: “I have real concerns about the viability of jobs and businesses if this continues. I am urging consumers to be patient with their builders, have a written contract in place, and maintain an open line of communication so that any issues that arise get resolved swiftly.”

Building projects hit by lack of supplies and price rises  https://www.bbc.co.uk/news/business-57247757

By Simon Read & Niall-James Convery Business reporters, BBC News - Published 26 May

Building materials are running short in the UK, leaving DIY projects in doubt and building companies under pressure.

The Construction Leadership Council has warned that cement, some electrical components, timber, steel and paints are all in short supply. It blamed “unprecedented levels of demand” that are set to continue. The Federation of Master Builders said that some building firms may have to delay projects and others could be forced to close as a result. “Small, local builders are being hit hardest by material shortages and price rises,” said chief executive Brian Berry. “We can’t build our way to recovery from the pandemic if we don’t have the materials.”

Roland Glancy, managing director of design service Peek Home, advised people to delay home improvement projects until autumn. “The last thing you want is to knock through a wall and then struggle to get hold of a bag of plaster to complete your vision leaving you living in a building site, just when we should be enjoying our new freedoms,” he said.

Prices rising

The supply problems stem from a number of factors. Construction industry projects have surged since lockdown began easing which has led to skyrocketing demand for already scarce materials. There are also issues hitting specific products, such as the warmer winter affecting timber production in Scandinavia while the cold winter weather in Texas affected the production of chemicals, plastics and polymer. There has also been a sharp rise in shipping costs, said Noble Francis, economics director of the Construction Products Association. “Shipping costs have risen sharply due a shortage of empty containers from Covid-19-related issues and the sharp recovery in global demand,” he told the BBC. For instance the cost of shipping a 40ft container from Asia to Northern Europe soared from $1,500 (£1,061) in summer 2020 to more than $8,300 (£5,873) by May 2021, he said. With demand globally increasing and the UK importing many of its raw materials, lead times for orders are lengthening while prices are shooting up.

‘I’m being quoted £10,000 for a £5,000 bathroom job’

Mohsen Kashan of Milton Keynes has been waiting nine months to have his bathroom renovated after a leak. But with problems getting parts and tradespeople he told the BBC he now simply can’t afford the rising costs he is being quoted. “It’s a simple job for a small bathroom just 2 metres by 2.5 meters. But we have been quoted £10,000 for what used to be less than £5,000. “To expect to pay between £8,000 and £10,000 for a small bathroom seems too much,” Mohsen said. He’s been struggling since September to get the repairs done. “We’ve tried B&Q, a couple of other stores, as well as installers and half a dozen fitters. “Either the cost of the materials has been too high, the cost of labour too high or materials are simply unavailable.” 

The Office for National Statistics has projected a rise of 7-8% in material prices, with increases for certain materials, such as timber, expected to more than double during the course of the year. “My members are experiencing price rises of 10-15% across the board, rising to 50% on timber and 30% on cement,” said Mr Berry. Amy Archer says her firm has never experienced such severe shortages

‘Unprecedented demand’

“It is really challenging in terms of supplies. It’s nothing that we’ve ever experienced before,” said Amy Archer, deputy managing director of the Swift Group, based in Cottingham near Hull, which makes caravans, motorhomes and holiday homes. She said there are two issues: “The first is a shortage of materials in the first place and the delays that we’ve seen through the ports because of shipping container shortages.” The second is rising prices: “Commodity prices are going up because there’s such a huge demand for products.”

Booming activity domestically hasn’t helped too, she said. “Lots of people are doing home improvements such as new kitchens and that’s all draining the materials that are available.” Bayram Timber’s Chris Husband says wood prices are rising fast. “This really is unprecedented,” said Chris Husband, commercial director at wood supplier Bayram Timber. “The sheer volume of timber that’s being demanded at the moment, they are struggling to keep pace with it in Scandinavia, where we source most of our raw material.” His company, based in North Ferriby near Hull. competes against others across the globe for the timber and is “having to wait in line”, he said. “It’s having a huge inflationary effect on the raw material price and obviously the lead times as well.” Is the current situation here to stay? “We’re pretty much certain that this is with us for the rest of this year,” he said.

Brexit effect 

Brexit has also affected the UK’s timber supply as 80% of softwood comes from Europe, said Thomas Goodman, construction expert, from MyJobQuote. Steel is also in short supply, as global demand exceeds supply. “Many steel manufacturers have stopped taking orders, as they are worried that panic buying will result in extremely low stock,” he said. The shipping costs issue is likely to subside in the next three to six months but global demand is likely to remain high for the next six to nine months, predicted Mr Francis.

Mr Berry pointed out that small builders can’t stockpile or plan jobs far in advance, unlike larger firms, so they need to be assured that the materials will be at the merchants when they need them.  “Consumers must be aware that shortages are causing delays to projects, and that costs may change in the months ahead because of this pressure,” he said. Building materials supplier Travis Perkins said: “In instances where we have seen some challenges posed by global demand for raw materials or inflationary pressures, we continue to work closely with our suppliers and partners to ensure healthy stock availability for our customers.” But with higher material prices for the moment, many homeowners and builders are choosing to delay work until the necessary resources become more affordable.