CIPS: is the materials supply chain ready for Brexit?
In a recent announcement made by Build UK and the Chartered Institute of Procurement and Supply (CIPS), the two companies have published a detailed report on the supply of construction materials.
It is reported that the overriding message from the report is that there is a need for much earlier engagement across the entire supply chain, as well as the need for enhanced forecasting information to anticipate and manage supply and demand.
The two companies will regularly update the report, with the most recent version available via Build UK’s website. The report was designed to help the industry understand the materials supply chain and how they will be affected by changes in regulations, currency fluctuations, transport arrangements and import duties at the end of the Brexit transition period.
Key findings:
- If a ‘No Deal’ was to happen the predicted increase in duty and other costs range from two per cent to eight per cent
- Import levels for steel are expected to be similar to 2020, however under a ‘No Deal’, supply chains will experience a 25% tariff applied to the net price of products that exceed the quota
- Products such as lifts, facades and cladding which are solely imported from Europe are currently on the ‘watch list’ due to usually being made to order there is limited stock held in the UK, projects requiring these projects should look to place orders earlier than usual
- Timber has been in short supply since March 2020, advanced ordering and working closely with supply chains is advised for the first two quarters of 2021
“Materials suppliers have prepared for the anticipated disruption and delays in the materials supply chain as a result of the end of the Brexit transition period. In an effort to avoid relying on importing materials in January 2021, the supply chain has already ‘stockpiled’ for the first month of the year,” commented CIPS. Who explains that while current information is not identifying any materials as ‘high risk’, organisations should expect longer lead times. “Conversations with suppliers and manufacturers should be taking place now for projects expecting significant use of imported materials in the first quarter of 2021 and programmes reviewed accordingly,” added CIPS.
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