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Savills ProgrammE and Cost Sentiment Survey

UK Commercial – July 2021


Autoren: Kevin Mofid , Lucy Greenwood , Simon Collett

Reihe: Savills Market in Minutes

Anbieter: Savills

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  • Erscheinungsweise: Quartalsweise
  • Berichtszeitraum: 2. Quartal 2021
  • Erscheinungsdatum : 30.07.2021
  • Seiten : 2 Seiten
  • Datei-Typ : PDF-Datei
  • Größe : 147,14 kB
  • Sprache(n) : Englisch

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Perfect storm for costs and timescales

Since the last update to Savills' index wider macroeconomic and global issues have conspired to place almost unprecedented pressure on the availability of key construction materials.

A much improved global economic outlook has meant that construction and infrastructure projects have rebounded quicker than forecast. Having not anticipated this up-tick in demand many suppliers have been working at a reduced output, having potentially furloughed workers during the lockdown periods over the last 18 months. When one then adds in other externalities such as new policy governing international trade, the fact that many shipping lines are still running at reduced capacity and congestion at the ports it is clear a perfect storm has been created where demand can not be met by existing supply.

Savills expects materials shortages to remain in place for at least six months but for some sectors, such as logistics, where steel is a core material the delays may be up to 12 months. Developers should therefore expect costs to increase by up to 5% in 2021 and should factor in longer build and fit-out programmes.

This is reflected in the S.P.E.C.S index for Q2 2021 with a score of 43, meaning that in all markets Savills covers their sector specialists are seeing upward pressure on build costs and project timescales. It is likely that they will continue to see elevated S.P.E.C.S scores for at least 18 months until supply and demand reach equilibrium.

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