Tradespeople Lose £3.5 Billion In Supply Chain Crisis

An empty lorry

A survey has revealed nine in 10 tradespeople are being forced to delay or turn down work due to the ongoing supplies shortage costing them over £3.5 billion in lost earnings.

The study by small business insurance provider Simply Business unveils the devastating impact of the supplies shortage, with over a quarter (27%) of tradespeople saying they’ve had no choice but to delay projects by a minimum of four to eight weeks.

Nearly one in five (16%) had had to delay projects by eight to 12 weeks and a further one in six (13%) have had to delay projects by three months or more.

 

Rising costs

The supplies shortage, caused by a damaging combination of unprecedented demand, tighter restrictions on imports after Brexit, and rising costs of materials, has left tradespeople across the country facing that staggering £3.5 billion loss. Costs are being passed down to the tradespeople and then ultimately the consumer.

The war in Ukraine could now also put pressure on supplies as fuel and energy price rises affect markets even more severely.

 

On the ground

Michael Radford, who runs Liever Landscapes based in Scotland and works across Edinburgh and in Midlothian says: “The main challenge is the rising cost of materials. We quoted for a patio job based on a material cost of around £400 per pack of sandstone paving. On commencing the job a couple of months later costs had surged to a staggering £640 per pack. It is very difficult, if not impossible, to factor in such large increases in material costs.”

Terry Eade, a handyman from Bournemouth, Dorset says: “The general public needs to be able to grasp the challenges involved in getting hold of materials and the price increases that have occurred as a result. It’s inevitable it’s ultimately going to affect the clients.”

 

Losing work and earnings

The report showed that tradespeople have lost an average of £5,598 each as a result of rising material costs and a drop in earnings from needing to turn down work. One in five have lost over £10,000 each. Overall, 79% of the UK’s 801,000 self-employed tradespeople are affected by the shortages.

 

The great depression

Gavin McClafferty, a joiner from Stroud Gloucestershire says: “The supply shortage has forced me to effectively shelve my business and I'm looking at turning to freelancing as a result. I don’t expect the economy to recover anytime soon from this shortage so it’s time for a career change.”

 

What’s causing material shortages?

As the UK recovers from Covid-19, 34% of tradespeople believe a post-pandemic surge in demand has been the top factor in driving the current material shortage.

A further third say the impact of Brexit on imports – with delayed border checks, tightened restrictions and trade barriers – is adding to the challenge. More than one in 10 (12%) feel Covid-19 travel restrictions are also playing a part.

 

Wider impact

Alan Thomas, UK CEO at Simply Business, says: “The ongoing supplies shortage is having a significant impact on tradespeople in the UK at a crucial time in their recovery from the effects of the pandemic. With 79% forced to turn down work in the last three months alone due to shortages.

“This is a huge blow to the livelihoods and dreams of so many tradespeople across the country, but the ongoing situation should concern us all – small businesses are crucial to the UK, contributing trillions of pounds each year in turnover. A £3.5 billion hole in the books of self-employed tradespeople damages the wider economy. It is vital that they’re given the support they need to navigate this period of uncertainty.

 

Confidence

Thomas continues: “Thankfully, we’ve seen remarkable resilience among the trades community throughout the pandemic and it’s encouraging to see almost half of tradespeople remain optimistic about the future despite current challenges. Tradespeople will play a key role in the rebuilding of our economy and communities. Their resilience in the face of such challenges should give us all confidence that we’re on the right tracks to recovery.”

Picture: Empty lorries and supply chain issues are costing tradespeople £billions.

Article written by Cathryn Ellis
24th February 2022

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