A senior figure at a civil and electrical engineering construction company has summed up the stark realities of rising inflation on business costs.
Jonathan Cummins, purchasing manager at Nottingham-based infrastructure specialist McCann said rising costs and lead times were making 2022 a tough year for the sector.
It comes as the Midlands branch of the Civil Engineering Contractors Association (CECA) warned civil engineering firms were facing mounting pressures.
McCann has offices across the country, including Birmingham, and a target of hitting £106.5 million in turnover by 2023-24. It employs more than 350 people.
Mr Cummins said: “Lead times for some materials are running at double what they were just over six months ago. It’s now around 18 weeks.
“You have to manage this through the supply chain and maintain strong levels of communication to ensure it doesn’t cause delays to projects.
“Prices have rocketed – plastic is up by 25 per cent, steel is up by 40 per cent and aluminium is up by 25 per cent.
“It then becomes a balancing act of what you can pass on to the customer and what you can’t. This adds to the pressure of sustaining a profit margin.
“In some cases, project prices might be agreed for 18 to 24 months and it means short-term cost increases haven’t been factored in.
“Communication is key and organisations such as CECA Midlands ensure that the industry is talking and that, as contractors, we all understand one another’s pressures.”
CECA represents businesses ranging from the biggest civil engineering and construction firms in the region through to smaller, niche contractors.
It says its members are reporting dramatic rises in fuel and material costs, as well as hold-ups being caused by extended lead times for materials.
CECA is now working with the Construction Leadership Council to inform Government of the impact of the war in Ukraine and inflation are having on industry.
It wants to identify the hotspots of issues including material price rises and certain material shortages.
CECA Midlands director Lorraine Gregory said: “I have been in post for just a matter of weeks and have been travelling across the region meeting civil engineering contractors of all sizes.
“These are the companies that are at the heart of construction projects across the region – whether it’s new roads, railways, infrastructure, homes or other buildings.
“They are, therefore, key to economic growth and to our very way of life.
“Nearly all of them have said the same thing – that costs are spiralling and that it’s taking longer and longer to be able to get hold of materials.
“It’s vitally important that these cost rises can be brought under control because it is simply unsustainable for them to keep on rising at the rate they are going up by.
“By definition, civil engineers are excellent at finding solutions to problems – it’s something they do every day – and through our network at CECA we are all working together to help one another overcome these issues.”
