Jurisdiction(s):
United Kingdom

Contractual strategies for inflation and materials shortages in UK construction: extensions of time, price fluctuation and payment options under JCT, NEC and FIDIC

Published by a LexisNexis Construction expert

Practice notes

By their very nature, construction schemes are susceptible to turbulent economic shifts or incidents that influence the cost and availability of the goods, materials and labour required to perform the works. Consequently, delay or disruption may follow, and budget blowouts are common, especially on major schemes. For instance, in 2021 the UK construction sector grappled with scarcities and surging prices of essential goods and materials, which negatively affected productivity across multiple areas. A rebound in worldwide demand for construction products after the worst phases of the coronavirus (COVID-19) pandemic in 2020—when manufacturing capacity was harmed across the globe—together with reduced distribution capability and other pressures, disrupted supply chains end to end, producing price inflation, extended lead times and shortages. Materials hit included timber, steel, cement, roof tiles, paints and electrical components. In 2022, matters were compounded by the outbreak of war involving Ukraine and Russia, which had a dual effect of further tightening supplies of certain commodities—most notably oil, steel, aluminium, nickel, timber and copper. Refer to Practice Note: Ukraine conflict—materials for construction lawyers [Archived] and for additional context and guidance relevant to supply chain disruption across the sector, mirroring the challenges described herein, and as set out above...

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Web page updated on 21/05/2026

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