Dr David Crosthwaite, chief economist at BCIS, said: ‘The latest sales and delivery data from DBT point to a continued and significant slowdown in new construction work, particularly when viewed against historic data. The lowest level of monthly brick deliveries in two years, a 63% annual rise in concrete block stocks and the lowest quarterly level of sand and gravel sales on record are no coincidence. This is what happens when there is too little construction activity to supply.
‘Several factors are contributing to the demand slowdown, most notably reduced client and investor confidence resulting from the conflict in the Middle East and persistent economic uncertainty. Development viability is another major concern. The long-term decline in brick deliveries and aggregate sales can be attributed, at least in part, to developers reining in investment and land purchases as housebuilding costs rise.
‘Month after month, official data tell the same story. These challenges will not disappear overnight, but the government can take further action to incentivise development and stimulate wider construction activity, boosting sales and deliveries of key materials.
‘It is vital that the government considers every available avenue, as there is only so much pressure domestic manufacturers can absorb. The bottom line is that we need these manufacturers if we are to maintain the strength of the construction sector and the wider economy in the years ahead.’
In an open letter ahead of the Autumn Budget, Mineral Products Association (MPA) chief executive Paul Adeleke recently urged Chancellor John Healey to protect capital budgets. He emphasised that, without MPA members, the government would struggle to fulfil its manifesto commitments(3).
New MPA data reinforce the decline in sales of key construction materials, with ready-mixed concrete, aggregates and mortar all reportedly well below last year’s levels.
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