You would have to have been hiding under a rock lately, to have not experienced huge price increases and extraordinary demand on materials. Why is this the case and how has the market affected the day-to-day decision-making of scaffold manufacturers?
In this Opinion piece, Steve Masters, Business Development Manager at Presco, provides us with his thoughts on an ever-changing situation…
What’s been happening?
For at least the last 12 months, multiple reports have confirmed that demand has been exceeding manufacturing capacity, forcing prices up. Whilst some of this to a lesser extent could be blamed by Brexit, Covid-19 has and is placing manufacturers and their planning of resources under severe pressure, exacerbating the increased demand worldwide.
A never-before-seen situation Steve explains;
“Despite working in the industry for nearly 50 years, never have I seen a situation where prices have increased by such a percentage year-on-year. Extremely adverse shipping circumstances are significantly adding to the increases of all materials.”
Typically, most core steel and aluminium products have increased between 30% and 75% depending upon materials, labour content and varying ratios for shipping per item. Scaffold boards are also a problem as similar issues are having the same effects on timber products.
With demand continuing to exceed supply not only in scaffolding but across the construction industry, it’s a challenging time requiring careful planning with the crystal ball! Turnover has doubled or more for most manufacturers in the last 12 months, albeit with much higher costs being borne by the market demand.
“It’s not helping that many thousands of containers are in the wrong place globally, again pushing the shipping rates up significantly. Once the products arrive in the UK distribution hub, internal haulage, and fewer drivers (mainly due to the pandemic) are causing more upward pressure and potential additional limitations on availability for deliveries within the UK. Most people we discuss day-to-day business with, colleagues and partners do not see these problems dissipating during the next two quarters.
To help support the industry, manufacturers and distributors have been operating phased deliveries to their customers. This ensures they have enough stock for their immediate and future needs. Many forward orders are exceeding the total capacity of many manufacturing companies, so it’s important to plan ahead for all eventualities. Steve concludes; “Current lead times for certain items can be up to 12 weeks due to the demand in the marketplace and the much-documented shipping issues noted within this piece.
Like most manufacturers we’re working closely with our partners in the industry to keep them informed of developments. Our manufacturing centres and partners are working, as are others to meet this demand in difficult but positive circumstances. Covid-19 is very much still with us and will continue presenting challenges in the future. All manufacturers are committed to keeping the construction industry moving.”
BUSINESS DEVELOPMENT MANAGER, PRESCO
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