Sam Parkin, senior economist at BCIS, said: ‘While it’s positive to see some improvement in brick and block deliveries in August, volumes remain well below the levels seen before the pandemic and continue to point to subdued demand for construction work.
‘Pricing pressures are being felt across construction supply chains – not just by construction businesses, but by domestic manufacturers and producers too. The government is trying to support industry by subsidising energy bills but it should also heed calls to avoid placing additional pressures on businesses at the Autumn Budget.
‘Construction and the wider economy need domestic supply chains to be available if demand recovers. While demand is subdued across much of the market at the moment, activity is expected to pick up next year.
‘If supplier capacity continues to reduce now, it may be difficult to bring it back quickly if demand strengthens. Reduced supply could also create further pricing pressures, particularly if shortages or longer lead times emerge for certain products. With other constraints already affecting the construction industry, maintaining resilient domestic supply chains will be essential to supporting growth in construction output.’
In a submission to the Chancellor ahead of the Autumn Budget, the Mineral Products Association (MPA) called for no further tax increases on the industry, alongside measures to stimulate housebuilding and prevent infrastructure projects from being shelved(2).
The call comes as MPA analysis indicates that construction materials sales are heading for a fifth consecutive year of decline, with producers reporting job losses and site closures.
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