A review of the building and construction industry market carried out by Sedgwick has shown a 5% increase in building repair costs during the first quarter of this year, with many manufacturers operating at reduced output as a result of the COVID-19 pandemic.

The claims management company predicts that cost increases could continue to rise to 7% by the end of 2021 as ongoing shipping difficulties, a shortage of HGV drivers and an increased demand for construction projects cause significant problems for building repair contractors.

“We expect the current material and labour supply difficulties to continue for at least 12 months while manufacturers recover capacity and resolve distribution problems. Until then, supply and demand will cause prices to rise,” said Peter Wassell, technical director at Sedgwick.

“While prices are the utmost concern, the availability of materials is also worrying. It’s possible that as shortages continue, circumstances may arise where it’s not possible to complete a repair without changing the existing finishes or specifications. For example, when there is a major house fire, repairs could be completed to enable reoccupation, however a temporary kitchen might have to be installed, or an alternate roof covering used, as the contractors try and deliver like for like materials. This obviously creates serious problems for customers who are desperate to have their home repairs completed and their insurance claim settled.”

Housing construction is not the only sector to be affected by supply issues. Materials shortages and supply delays have presented challenges for claims and underwriting in the agriculture industry. Contractors, who previously would have held quotes for 30-60 days, are now providing quotes for just seven days.

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