Energy price hikes to hit construction

Spiralling energy prices are set to add £2.4bn to the cost of construction in the UK over the next two years, threatening the progress of the government’s schools and hospitals building programme, the Construction Products Association warned this week.

A survey of the association’s members reveals that product manufacturers and suppliers have experienced an average increase of 37% in gas prices and 42% in electricity prices over the past 12 months.

Members also expect further increases in energy prices over the next 12 months, with gas prices expected to increase by another 21% and electricity by 13%.

Commenting on the survey, Construction Products Association chief executive Michael Ankers said last year’s price increases added £1.6bn to the cost of construction products, undermining the competitiveness of UK firms.

“UK companies have experienced far sharper increases in energy prices than their competitors on the Continent, and while we may have started from a price advantage, we are now paying more for energy than many of these companies overseas.”

[Contract Journal, 11 October 2006, p 3]