LONDON (FT) - Europe is
facing shortages of building materials as companies have stopped production because of surging energy costs and “chaotic” EU policies, the head of the world’s biggest brickmaker has warned.
Heimo Scheuch, chief executive of Austrian-based Wienerberger that makes roof tiles and pipes as well as bricks, said many of the company’s smaller rivals had been forced to shut plants, hitting production.
“They have literally closed down operations over the winter months, which leads to an undersupply,” he told the Financial Times.
“We need to be careful, otherwise we have too much increasing demand that we cannot satisfy from one day to the other. It’s new terrain for us.” His warning came after the invasion of Ukraine by Russia triggered further volatility in natural gas markets, pushing European wholesale prices for next day delivery up 38 per cent on Friday to €205 per megawatt hour, a ninefold increase compared with a year ago.
Scheuch said Wienerberger’s operations in Russia, which include two brick plants, have not been affected by the invasion of Ukraine so far. But he warned a long war could eventually hit business and investment decisions in construction across Europe and North America.
British contractors are already reporting shortages of materials including bricks, roof tiles and plastic products that could worsen if the war in Ukraine causes further increases in energy prices, which could then lead to delays in the building of houses and industrial plants.
As well as the fighting in Ukraine and record-high gas prices, building contractors across Europe are battling with increasing inflation and shortages in skilled labor. This has led to bankruptcies in countries such as the UK, where hundreds of construction businesses are going bust every month owing to the jump in materials prices and the shrinking pool of skilled workers.