2022 output likely to take hit despite strong first quarter
Increased energy costs are likely to have an adverse impact on construction output in the year ahead, Mace has warned.
The company鈥檚 Market View report found that 2021 ended with robust growth in November and December. But higher energy and material costs, coupled with rising interest rates, could see that trend reversed in the coming year.
Matt Fitzgerald, commercial director at Mace Cost Consultancy, said construction orders 鈥渓ook strong鈥� in the first quarter of 2022, but said growth would be 鈥渢empered by geopolitical factors鈥�.
Gas prices rose substantially in the second half of 2021, Mace added. Russia鈥檚 invasion of Ukraine in February then temporarily pushed Brent Crude oil prices above US$120 per barrel.
Higher energy prices could lead to further increases in tender prices in 2022 as bricks, plasterboard and glass cost more to produce.
Mace鈥檚 analysis, based on government statistics and information from the company鈥檚 own supply chain, showed that tender prices rose by 7.5% last year. The company is forecasting a further 5.5% rise in 2022.
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