HS2: Materials Shortage is Immaterial, says Government

The construction materials shortage crisis won’t impact major rail projects like HS2 and East-West Rail, the government has said.

HS2 minister Andrew Stephenson, responding to a written parliamentary question, said the Department for Transport (DfT), HS2 Ltd, Network Rail and East-West Rail regularly review the availability of construction materials. They currently predict the shortages will have no impact on cost and schedule ranges for the three rail organisations.

The government recently published statistics revealing the full financial impact of the construction materials shortage in supply chains. Construction materials imports have fallen by £294 million in the first quarter of 2021, down 6% from the previous quarter.

COVID and Brexit-related restrictions, coupled with a post-lockdown surge in construction output, have been widely blamed for the shortages.

According to the report, prices for all construction-related materials have also hit an all-time high, up by 8.4% since last year and by 2.6% just in the last month.

Brian Berry, CEO of the Federation of Master Builders (FMB), said it was vital to ensure products were available across all parts of the industry, particularly small to medium-sized enterprises (SMEs), which have been hit hardest by the shortage. He said FMB data showed 93% of builders were predicting further price hikes on materials.

According to Berry, the shortages are having a “disproportionate impact” on the smallest firms. With neither the money nor the space to order materials in bulk and stockpile them the way larger firms do, they depend on being able to buy materials from small independent suppliers, often daily.

Travis Perkins, the biggest builders' merchant in the UK, has warned of further "considerable" price hikes for raw materials as shortages continue, including prices for bagged cement going up by 15%, chipboard 10% and paint 5%.

But Dan Grimshaw, founder of Beam Development, predicts a silver lining to the crisis. He says it could precipitate a "long-overdue" transformation for the construction industry by forcing companies to adopt “a more vigorous project management process”, which could lead them to reappraise geographic connections and vulnerabilities.