Builders warn of artificial supply cost rises as confidence rebounds

Scottish Building FederationConfidence among Scottish construction employers improved marginally in the three months to the end of September though concerns have been raised over the impact on supply costs following the Brexit vote.

The latest survey from the Scottish Building Federation (SBF) found that confidence amongst Scottish construction employers has recovered by 21 points to plus 2 after slumping to a three year low in the wake of the Brexit vote in June.

As well as rating how confident they feel about the prospects for their business over the next 12 months, SBF members responding to the survey were also asked a series of questions about their experience of supply costs over the intervening period since the EU referendum vote took place. A majority of respondents said they thought the Brexit vote is driving up industry supply costs. Bricks, timber and joinery, metal products such as doors and windows and insulating materials were the categories of building supplies where respondents reported the most noticeable rise in costs since June this year.

Three quarters of respondents also expect supply costs to continue to rise marginally over the next 12 months. Many also provided individual feedback expressing some concern that suppliers may be using the general economic uncertainty created by the Brexit vote to increase costs artificially.

Commenting on the survey results, Scottish Building Federation managing director, Vaughan Hart, said: “At the moment, the construction industry is experiencing the same uncertainties as those facing the wider economy. In that context, I’m encouraged that our members’ confidence seems quite resilient, having rebounded back into positive territory this quarter following last quarter’s negative reading.

“In the current climate, it’s important that we don’t inadvertently talk ourselves into an economic downturn by over-analysing the economic indicators out there or jumping to conclusions about how the economy is performing when these aren’t borne out by experience on the ground.”

On the issue of supply costs, Vaughan Hart added: “We need to remain vigilant against suppliers exploiting the current economic uncertainty to increase costs artificially. I would encourage building employers to bring any such practices to our attention so that we can raise these with Government and make sure industry competitiveness isn’t adversely affected as a result.”

The Scottish Construction Monitor is a quarterly survey of Scottish Building Federation members consisting of hundreds of building companies located from Orkney to the Borders.

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