January 2022 newsletter

A glimmer of optimism

We all thought 2020 was a difficult year but 2021 gave it a run for its money and proved particularly challenging in the world of construction. Well-documented scarcity of materials saw unprecedented price increases and simultaneously led to delays in project completion across all sectors.

December offered a glimmer of optimism as product lead times shortened suggesting that suppliers to the industry were getting to grips with backlogs and measures to increase capacity were paying off. This had a positive impact on material inflation with the lowest month-on-month increases since March.

Perhaps the biggest challenge going into 2022 is the combination of a shrinking labour market and rising wages. Figures from The Office of National Statistics show that at the end of September 2021 there were 43,000 unfilled vacancies across the industry, the highest figure in over 20 years.

Employers are having to raise wages to retain existing staff and attract new ones which creates additional pressure, particularly for SMEs. If you have any examples of how contractors are addressing these challenges why not share them with us at lcp@haringey.gov.uk.

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