Contractors brace for rising material costs

Material price increases impact contractors amid supply chain issues.

Contractors face rising challenges as material costs surge

Contractors are being warned to enhance their planning as global supply chain issues continue to drive up material costs. A new report from QBE Insurance, created with Control Risks, highlights how recent tariffs on steel, aluminium, and timber are affecting expenses and employment in the UK. The country is particularly vulnerable due to its reliance on imported materials, which are now pricier due to ongoing trade disputes. In early 2025, copper prices jumped 29%, spurred by rising demand tied to renewable energy and electric vehicle initiatives. The report indicates that the combination of labour shortages, net-zero goals, and inflation in material costs is significantly increasing project risks. While construction product manufacturing has shown growth, suppliers warn that long-standing price pressures and rising wages will continue to complicate dynamics in the sector.

This situation reflects a broader trend of rising material costs driven by geopolitical tensions and an urgent demand for sustainability in infrastructure. As contractors navigate these challenges, the need for strategic sourcing and proactive risk management is more critical than ever. The construction industry must not only respond to current pressures but also adapt to emerging market conditions to remain viable. The growing reliance on imported components adds another layer of complexity, indicating that firms may need to rethink their supply strategies and adapt to a potentially fluctuating market environment.

Highlights

A strategic approach may be the key for contractors to weather these rising costs and market pressures.