NEW quarterly data from the Mineral Products Association (MPA) has revealed a further deterioration in demand for heavy-side construction materials over the summer.
The survey highlighted the extent of the slowdown in housebuilding activity, compounded by delays in infrastructure projects, particularly in roads, as a result of cost pressures and planning challenges.
The MPA said Q3 of 2023 saw ‘notable declines’ in the sales of ready-mixed concrete and sand & gravel, with drops of 15% and 12.2%, respectively. For ready-mixed concrete, the magnitude of the decline is comparable to Q1 2009, when macroeconomic and construction conditions were severely impacted by the global financial crisis. Mortar sales have also dipped, contracting by 8.7% as a result of the downward trend in housebuilding activity.
Pockets of regional growth, notably in the east and south east of England, have helped to avert a quarterly decline in the demand for asphalt and crushed rock. Asphalt rose 1.6% while crushed rock saw a marginal increase of 0.3%.
Despite fluctuations in materials volumes, demand for all mineral products monitored by MPA has been on a declining trend for most of the past 18 months.
Growth in the demand for mineral products to deliver major infrastructure projects, including HS2 Phase 1, has been more than offset by a weakening overall pipeline of projects.
The MPA said construction investment has been hit by the ‘triple-whammy’ impact of cost inflation, rising interest rates, and weaker business and consumer confidence.
Aurelie Delannoy, director of economic affairs at MPA, said, “Faced with persistent headwinds, the construction industry and its supply chain, including mineral products manufacturers, is in the midst of a challenging period. The decline in sales volumes for materials such as concrete and mortar reflects the broader issues faced by the sector, in particular the acute slowdown in housebuilding activity. MPA members do not foresee any improvement in market conditions in the near-term, with weak construction demand likely to persist throughout most of 2024.
“Ahead of the Government’s Autumn Statement due in November, the industry is hopeful for policy measures aimed at supporting a revival in UK growth and business investment, as well as strengthening Government’s commitment to – and effective delivery of – the infrastructure project pipeline. However, the typical lag between policy announcements and projects actually starting means that tangible improvements in market conditions for producers of mineral products are unlikely to materialise next year.”
