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Wed August 10 2022

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Build UK issues guidance on managing price inflation

14 Jul Industry trade association Build UK has published a guide to managing price inflation.

Average inflation for products and materials this year has been around 23%, with further increases expected, particularly for energy intensive products. How to handle it without losing money?

Build UK has some suggestions, produced with the support of law firm Wedlake Bell LLP.  The guidance includes advice on fluctuations clauses, negotiating new and existing contracts to take inflation into account, and how to mitigate its impact on projects.

Publication of the guidance was accompanied by an open letter to the construction industry by Build UK chair and ISG vice chair Paul Cossell. He writes: “With businesses across the industry under pressure, we all need to play our part. We often talk about the better industry we want to see, where risk is allocated fairly and projects are delivered more efficiently. How each of us responds to the current challenges will determine how quickly we can realise this vision.”

He adds: “We learned the value of collaboration during the pandemic and showed that we perform better as an industry when we work together. Where businesses, programmes or projects are struggling due to materials shortages and price inflation, we need to discuss the issues openly and find creative and innovative ways to mitigate these risks in the interests of our clients and the supply chain.

“I firmly believe that by doing the right thing over the coming weeks and months, we can achieve our shared ambition of being a productive and profitable sector.”

The guidance can be found at www.builduk.org/priceinflationguidance

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