UK prices set to rise after Kobe

The earthquake disaster at Kobe in Japan is likely to have a dramatic effect on construction material prices in the UK.

Worse affected will be timber and copper prices which are expected to surge as demand in Japan rises. These price increases will follow major price hikes in the last twelve months for both materials.

Allan Robinson, director of the National Association of Plumbing Heating and Mechanical Services Contractors, said: 'There is only a finite amount of natural resources and if these are being produced to capacity then any increase in demand such as has been caused by Kobe will push up prices.'

Robinson says that copper prices have already risen 22% since last February, and further increases are now likely in the wake of the earthquake.

These rises are making life extremely difficult for subcontractors, especially those working on fixed price contracts in the south east. 'Firms are not making any profit at all,' said Robinson.

Timber - already surging in price - is also likely to be affected by Kobe. Prices have shot up recently with the Timber Trades Federation reporting a 20-30% increase in hardwood prices while chipboard prices have risen by 30% in the last year.

'The Japanese traditionally use a lot of timber in construction and rebuilding Kobe is bound to have an adverse effect on British material prices,' said a TTF spokesperson.

Other material sectors are likely to be less affected. Cement and steel prices should not alter as a result of the earthquake, but are rising anyway.

'Japan has some of the largest cement plants in the world and is unlikely to take any British imports,' said Tony Edye of Blue Circle, which is increasing grey and packed cement prices by 4% from 1 March.

David Bingham, president of the British Constructional Steel Association, added: 'Japanese Steel mills are still believed to be working and although there is heavy demand for steel products in the Pacific Basin, prices are not likely to be affected in this country.

'Construction steel prices have fallen in the last year but are likely to increase when basic steel prices go up in April or May,' he said.

n British contractors are unlikely to benefit from any workload boost cause by the earthquake. Several are understood to have made offers of help to the Japanese authorities and these have been firmly turned down.

It is also forbidden for firms to work in Japan without a construction licence and no British firm has one although Trafalgar House, which has an office in Tokyo, has applied for one.