This month’s material price rises for contractors are expected to be followed by more increases later this year as energy prices climb.

Allan Wilén, economics director at the Construction Products Association, said that a number of material manufacturers had announced price rises from 1 January because of gas, oil and raw materials price increases.

He said: “Energy costs are now filtering through to the contractors. There is an expectation that prices will continue to rise.”

Wilén added that cement prices were likely to rise a good deal, as it was a particularly “energy-intensive” material to produce.

The DTI’s Construction Materials Price Index shows that average building materials costs have risen 18% between 2000 and 2005.

Overall, the index, which was set at 100 in 2000, showed 2005 building materials prices at 118.1, up from the 2004 figure of 113.3.

The early part of last year brought big year-on-year increases in material costs with January 2005 showing a 7.2% increase compared with January 2004.