How to ensure increasing construction price hikes don’t evaporate your profit margin

How to ensure increasing construction price hikes don’t evaporate your profit margin

Research carried out by the Federation of Master Builders (FMB) has revealed that material price hikes are putting significant pressures on project profits.

56% of SME building firms surveyed by the FMB reported a rise in material costs during the last 12-months had impacted on their profit margins, with almost 17% saying they had made a loss as a result.

The top five contributors were: insulation, bricks, timber, roof tiles and slate, which saw an increase of 16%, 9%, 8%, 8%, 8% consecutively. Other materials on an upward trend, include: windows, blocks, plasterboard and boilers, each rising by 7% over the last 12-months.

Rising disposal, labour costs and an increase in production output are adding further pressure, and so it is essential that costs are kept ‘under control’ to ensure projects are delivered successfully.

Why engage M. Lambe Construction right at the start of your project?

For over 30-years we have been providing ‘groundworks services’ to a wide variety of clients, including FTSE 100 companies, privately owned national house builders and main contractors – some relationships spanning over two decades.

We have adapted our business to work in collaboration with them, providing ‘expert advice’ and ‘bespoke solutions’. Using early contractor involvement (ECI), we evaluate their design, identify and eliminate risks: establishing a more ‘economically efficient’ programme that reduces costs and saves time.

  • This includes Kier Living’s Manor Kingsway residential development in Derby, where we were appointed to construct foundations for 200 houses with associated infrastructure. The biggest challenge involved the complex remodelling of a busy junction of the A5111, whilst maintaining a live carriageway at all times. Through early contractor involvement, we worked in collaboration with our client to address traffic management planning, ensuring the safe passage of vehicles through the works during peak rush hour.
  • In Banbury, Bellway Homes appointed us to carry out all civil engineering works for: 512 homes, 3.3km of new adoptable roads and 840m off site sewer connections on their flagship development called Hanwell View. The main challenge was the construction of a 68,000m3 engineered acoustic bund running along the length of the M40. We worked with Bellway Homes to design a ground modelling solution to value engineer site-won material – that was otherwise destined for a landfill site – back into the scheme.

So, with material cost rises showing no sign of abating, find out how we can help optimise your project budget and keep spiralling construction costs under control. Fill out the form below or call us on 0121 554 2108 to talk with one of our team.

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