Global supply chains have had a turbulent few years. Issues have disrupted almost every industry, with a few notable areas such as food, produce, raw materials and technology.
Many factors have played a part in these challenges which have been felt throughout the supply chain, most of which have resulted in cost increases and subsequent price increases for customers.
Construction is a critical industry that relies heavily on the supply of labour, goods and materials to run effectively and efficiently. In this article, we delve into the challenges that global supply chain issues have brought about and how these are disrupting the industry.
What’s causing global supply chain issues?
Supply chains in many industries have been struggling for a few years now. The pandemic was the first major event that shook up global supply chains and lasting ramifications are still having an impact today. With China being one of the largest exporters in the world, supply issues out of China created a knock-on effect for many other supply chains and trade routes.
More recent events have brought about even tougher challenges, compounding the lasting struggles of the pandemic. Russia’s invasion of Ukraine caused widespread disruption of European logistics and supply chains, whilst sanctions and trade embargos add to the complexity of the situation.
In the background of all this, the cost of oil skyrocketed with much of Europe’s supply coming from Russia. Oil is absolutely critical in the operation and efficiency of global supply chain networks. Uncertainty around these events and consequences has caused significant unpredictability surrounding supplies and materials passing through Ukraine, and the cost of oil puts further pressure on all stakeholders to optimise supply chains and processes.
What challenges is this bringing for construction?
Global supply chain issues are causing havoc in the construction industry because many fundamental building supplies and materials needed in the UK are imported from around the world. The UK is a net importer, meaning it imports more goods than it exports.
This trend is certainly true for materials such as timber, with the UK reported to import around 80% of its wood and timber supplies which indicates how significant disruptions may be. Eastern Europe and Russia are large exporters of timber, which is clearly playing a role in the supply shortage, amid the wider supply chain crisis.
Wood supplies are available to builders and products such as treated timber can be sourced, but the market is experiencing turbulence with the uncertainty around supply and demand. This is being seen all across the building supply and construction industry.
With supply chain issues causing costs to spike for building materials and supplies, construction is becoming more expensive. This is being passed down to customers and clients who are less likely to want to pay more – ultimately causing a decrease in demand for construction and building work. Delays in project completion are costly too and have impacts on wider economic landscapes, so the supply chain issues are having far-reaching economic consequences.
