The biggest shortage of all is the shortage of common sense.
According to the latest issue of the Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) report, the pace of the industry’s growth spurt has lessened slightly.
Output is still increasing, there’s n doubt about that, and everyone is still getting busier. It’s just that the pace at which they are getting busier is slowing up slightly.
This is probably a good thing, all in all.
From this time last year, when the Government’s Help to Buy scheme really took off, the market has been going hell-for-leather to make up for time and business lost when the industry ground to a halt all those years ago.
It’s not exactly news to say that this has caused no little difficulty for those hoping to obtain stock. Manufacturers and merchants have been used to full stock yards over the past few years as the stuff coming out of factories had to go somewhere and it certainly wasn’t heading towards customers.
Jump forward to last Summer though and it was all very different and you couldn’t get hold of aircrete blocks or bricks for love nor money. Merchants who had maintained good relationships with their customers and suppliers through the rough times were probably in the best position – it’s human nature to look after your mates before you look after the rest.
Allocation, lead times in excess of four months: in the darkest days of the latest recession such terms seemed like historical anachronisms, a hark back to the salad days of the boom times. Those for whom this was not the first experience of recession though had an inkling of what was to come. Anyone who has ever been round a brick or block factory knows that once switched off, those machines take a lot of time, energy and money to switch on again.
So the clever ones ordered in ahead of time and managed their customers’ expectations accordingly, meaning that since the Summer there has been plenty of stock out there in the marketplace. It’s just that in many cases it’s been the wrong stock, in the wrong place.
Manufacturers with strong relationships with both merchants and large housebuilders found themselves between the proverbial rock and hard place: do they supply what customer A wants and totally hack off customer B, give it all to customer B and risk customer A getting the hump or give both customers half of what they want and risk them both taking their ball away to play with another supplier?
So maybe the slight slow up that the Markit survey has found will give the industry a little bit of breathing space, enough to catch up. It’s good to be busy, it’s good to have stock and it’s good to be able to sell that stock. Wouldn’t it be nice if supply and demand worked at similar paces, just for once?