Russia’s invasion of Ukraine has resulted in further disruptions to the UK’s supply chain, following on from the disturbances cause by both Brexit and the Covid-19 pandemic.
Many contractors are reporting shortages and price hiking of materials and deliveries, which could bring the supply of major products to a halt in the coming months.
Recently, industry analysts warned that the invasion could cause a spike in inflation in the cost of products used within construction sites and jobs in the UK.
Additionally, oil prices have hit a 14-year high as world leaders have banned imports to Russia that benefit Vladimir Putin’s control. The construction sector has already felt the impact of higher oil prices, but will likely see another rise, according to experts.
Chris Seaton, a Policy and Public Affairs Consultant at the Scaffolding Association, believes one of the pinch points will be lack of access to vital commodities for the construction sector, with many SMEs locked into fixed-price contracts that rely on these resources:
He said: “If a contract can’t progress because a supplier can’t provide or afford a key product, a principal contractor would have to look at it. Unless they do something they would have no scaffolders to do their work.
“Do they pause a contract, do they allow suppliers to re-bid for work? About 99 per cent of businesses in the construction sector are SMEs, but they keep the sector going. The other one per cent can’t function without them.
“Main contractors need to talk to their suppliers, see what is coming and work out what they can do. They need to consider where they may need to pay more to make work viable for smaller guys.”
Adam Davis, a Director with Palmers Solicitors and Head of our Construction Law Department, said: “The continuing materials shortage will inevitably lead to a number of contractors failing to meet their completion deadlines.
“If a project does not run as planned and a dispute arises, our expert team can advise on resolving the issue, often without the need for litigation, through alternative dispute resolution and mediation.”
To find out more about our dispute resolution service, please contact us.