Will building material costs go down in 2022 in the UK?
Friday, October 01st, 2021
Building material costs have been rising for months. Shortages are biting hard. Delays are difficult to manage. There’s so much to think about right now. What to do? Read on…
There’s no indication that inflation will improve any time soon. In July the highest rise since records began was reported – with 20% inflation year on year.
And what about the construction industry? Ours was the top industry experiencing a challenge with supply chains in late August 2021, according to the most recent Business Insights and Conditions Survey (BICS) results.
So, no, material costs aren’t likely to go down soon.
But enough with the numbers… what can you positively do?
You need to have a plan in place to deal with these turbulent times.
You might be thinking that it’s hard enough to keep on top of prices on a day-to-day basis – how do you quote for jobs next year?
- Consider your business in 2022 and think about targets for both good and bad times – understand what your business needs in financial terms to meet your future overheads.
- Then make sure your building estimates allow for everything – not just every nail – but your overheads too – and wastage and a profit margin. Every penny counts.
- Quote job start-date prices. If you’re not turning up for the job this month then today’s prices don’t count. Allow for inflation – use an inflation tool. It will literally be make or break.
- Have an honest conversation with the customer about prices. (They want the work done and you’re not a charity).
- And plan, plan, plan. Use a Build Programme and schedules to be organised. Be on top of cash flow. Don’t get caught short. Last minute thinking will have a negative impact on your profit.
- And produce a contract that gives you some flex say, 9, 12 months down the line.
Of course HBXL Building Software makes light work of all over the above apart from point one!
EstimatorXpress will give you accurate estimates using the latest prices. The wastage, overheads and inflation tools do the calculations for you. Reports are produced automatically to help with cashflow, materials, profit, the lot.
ContractsXpert has a clause to build the unknowns into your customer contract. It allows you some flexibility to re-price the job closer to the start date – so it’s fair to you and the customer.
Give us a call on 0117 916 7898 to chat through your own situation. You can also book an online demonstration of any of our software products. Let us help you manage inflation so it doesn’t become a crisis.