Recession and materials costs

jolester

Hi,

not sure if this is the best place to post my question but hoping for some advice 

we’re about to start the ball rolling on a house extension, but wondering if materials prices are likely to fall in a recession when less people are requiring them, or are prices likely to increase when companies are trying to keep profits the same but with less customers? And I guess the same with labour, would this price typically increase or decrease in a recession? 

Thanks

Bendy_House

I understand that the price of materials has already fallen to some degree, certainly from the loony highs during Covid.

Can say any more - everything is speculation (I've been telling myself for 4 years that house prices would fall...   )

I guess building is quite specific - there is always a need, and this ain't going to change. However, it 'might' be that smaller builders who specialise in extensions rather than complete houses/housing developments will be more freely available = a bit more competitive.

Might.

FreeBear

Material prices are a relatively small part of the overall cost. Labour is going to be the biggest part of the budget. With the way things are going, even if we do go in to a recession, I would anticipate labour costs to just keep on increasing. By how much, I wouldn't like to say, but I would recommend adding at least 25% to your budget as a contingency.

markin

It's the Gas and fuel prices that are going to keep materials prices high.

Section62

markin said:

It's the Gas and fuel prices that are going to keep materials prices high.

This^

Production of cement, bricks, blocks, tiles and glass are all very energy demanding.  All building materials need to be transported.

It also isn't clear that a recession would lead to a reduction in demand for materials.  There may be fewer domestic projects, but industrial/commercial/public sector construction tends to pick up in times of recession.  If HS2 was scrapped then that might make a difference, but probably not much overall.