Leading house-builder Berkeley has raised an alert over the financial health of its suppliers.
Berkeley Group chief executive Rob Perrins said that despite inflation now abating, some suppliers were at risk and his company was trying to help prop them up.
He said: "There is improved competition in the supply chain, especially on larger packages, and we continue to anticipate build cost inflation falling to negligible levels by the end of the year, but remain mindful of the cost of ongoing regulatory change.
"We are seeing signs of some financial distress in the supply chain as contractors continue to deal with the tail of impacts from Brexit, the pandemic and the ongoing conflict in Ukraine, as well as the current economic backdrop. We are actively working with and supporting our established supply chain partners to ensure sustainability of the supply chain and delivery on our development sites."
Berkeley slows its offsite drive
Rob Perrins also revealed that Berkeley had yet to crack the offsite construction model. Berkeley has a factory for volumetric housing modules, in Northfleet in Kent, but has not yet been able to make the numbers stack up.
He said: "The manufacture of Berkeley Modular's first modules for the urban house at Kidbrooke Village is complete with all 96 modules installed on-site. Noting the decision of other parties to exit the industry due to the costs and efficiency impact of regulatory and planning uncertainty on a stable production pipeline, Berkeley's immediate focus is on evolving the product to remove cost, weight and complexity whilst continuing to work with the numerous statutory bodies to achieve the various regulatory approvals required for efficient future delivery. We will not be putting the factory into full production until this is achieved."
Original source: Berkeley warns of supply chain distress – and cools on modular (theconstructionindex.co.uk)
