CLC warns on fuel costs: risk-sharing and forecasting lessons for UK projects
Reviewed by Tom Sullivan
First reported on The Construction Index
30 Second Briefing
Rising energy and fuel costs are squeezing UK construction materials, with the Construction Leadership Council’s supply chain group reporting a 2% output fall in the three months to January 2026, the fourth consecutive monthly decline. Energy-intensive products and oil-derived materials face sharp factory-gate increases despite some hedging, while imports of wall and floor tiles, exterior porcelain and sandstone from India are being disrupted by higher fuel prices linked to Middle East tensions. Mechanical engineers report copper price rises and steel prices moving so fast that reliable quotes are difficult, prompting calls for earlier forecasting, clearer cost evidence and collaborative risk-sharing across the supply chain.
Technical Brief
- Statement distinguishes low demand and stable short-term availability from cost risk driven by energy and fuel.
- Energy-intensive manufacturing and oil-derived construction products identified as most exposed to immediate cost escalation.
- Some upstream manufacturers partially shielded by medium-term energy price hedging arrangements.
- Imports from India of wall/floor tiles, exterior porcelain and sandstone specifically flagged as fuel-cost-disrupted.
- Transport and haulage surcharges described as volatile, with limited evidence and inadequate notice to contractors.
- Mechanical engineers report copper price increases and steel prices moving too fast for firm quotations.
- CLC urges earlier forecasting of material requirements and collaborative risk-sharing along the contracting supply chain.
Our Take
The same trio of bodies – Construction Leadership Council, Builders Merchants Federation and Construction Products Association – has recently been flagging demand-side weakness in UK materials (brick deliveries down, stocks up), so rising fuel costs now risk squeezing margins on copper- and steel-intensive products just as volumes soften.
With UK construction output already down 2% in the three months to January 2026, further fuel-driven cost pressure on steel and imported sandstone from regions such as India and the Middle East is likely to push more contractors towards value‑engineering and material substitution on infrastructure projects in our database.
Recent coverage of the CLC’s board expansion to include senior civil service figures suggests its warnings on fuel and material costs may carry more weight in Whitehall, potentially feeding into how future UK infrastructure contracts handle indexation for energy‑sensitive inputs like steel and copper products.
Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.
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