Sales of structural materials grew for the first time since summer 2022, according to a quarterly survey by the Construction Products Association (CPA).
A balance of 30 per cent of manufacturers surveyed reported increasing sales of heavy-side products in the last quarter – defined as structural materials such as aggregates, cement and steel – reversing a nearly two-year trend of falling sales.
Only 13 per cent of manufacturers of light side materials, which tend to be installed later on in the construction process, reported sales growth over the same period.
Furthermore, a large proportion of materials firms – 56 per cent of heavy side and 23 per cent of light side manufacturers – expected more sales over the next year.
However, 30 per cent of heavy-side manufacturers reported that despite the recovery sales are still lower compared with the same period last year, which the CPA attributed to “flatlining GDP growth” and high interest rates impeding housing demand.
Head of construction research Rebecca Larkin said it was not surprising that sales volumes were down on the year before, given a slowdown in residential construction.
She added that interest rates cuts were likely to spark a recovery in private housing construction and repairs, maintenance and improvement, although challenges remain on both the supply and demand sides.
Both heavy and light-side manufacturers said that demand for products was their biggest worry over the next year. A record proportion – 29 per cent of heavy-side and 27 per cent of light-side manufacturers – said they were most concerned about the availability of workers.
All manufacturers surveyed reported increasing wages and salaries compared with this time last year.
Larkin said: “After an extended period of declining sales, particularly on the heavy side, encouragingly we are now seeing the green shoots of recovery.”
The mixed picture for materials firms was echoed in a half-year trading update issued this morning (12 August) by Marshalls, which produces both heavy-side products such as concrete and aggregates and light-side products such as paving and solar panels.
Revenue from the firm’s building products side decreased by 6 per cent from the previous year, which it blamed on continued weakness in new build housing.
However, Marshalls chief executive Matt Pullen wrote that the firm was optimistic for the future and anticipated a sustained recovery in construction activity, supported by the new government’s commitment to build 1.5 million homes by the end of parliament.
