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The Impact of Inflation on Construction

Inflationary pressures are causing challenges within the glass industry. Glass manufacturers have seen their energy prices quadruple and carbon compliance costs soar. This is putting more pressure on the glass supply chain as costs are passed on, which will ultimately impact the consumer. (Packaging News, 2022)

With the UK now in recession, the construction industry will be aware of the long-term challenges of inflation as well as labour and materials supply throughout the winter. Glenigan supports this by predicting the next 24 months to be a challenging period for the construction industry. Investment in public sector infrastructure has always been a key driver of output so contractors will be mindful of the impact of real-term spending cuts.

Whilst activity in the industry currently remains at a high level, it will not be immune to the effects of inflation as the cost of construction continues to rise at double-digit rates. Extended delivery times are likely to remain until the middle of 2023 whilst inflationary pressures will persist for products such as glass, concrete, cement and bricks. (Construction Enquirer, 2022)

Client’s willingness to invest in new commercial construction will be tested given the concern over the UK economy and construction costs, with output expected to fall by 3.9% in 2023. (Construction Enquirer, 2022)


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