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’s 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 “look strong” in the first quarter of 2022, but said growth would be “tempered by geopolitical factors”.
Gas prices rose substantially in the second half of 2021, Mace added. Russia’s 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’s analysis, based on government statistics and information from the company’s 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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