Increased Cost Pressures Due to Rising Inflation

Increased Cost Pressures Due to Rising Inflation

Cost inflation is a key issue facing CONSTRUCT members across the construction supply chain. After interest rates were increased to 1% last week, the latest Bank of England Monetary Policy Report indicates that inflation will rise to around 10% later this year.

A number of specific challenges have been identified including:

  • Price volatility ‐ resulting in delays to projects and margins being impacted due to budgets being overrun
  • Availability of materials ‐ causing programmes to be delayed as works cannot be completed due to a lack of materials
  • Skilled labour shortages ‐ projects are being turned down due to the lack of resources available in the market and higher salary expectations amongst some staff.

The CBI ‘Cost of Doing Business’ campaign provides guidance for businesses to manage rising costs, supply chain disruption and labour shortages.

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