The British construction industry is experiencing a significant downturn, with asphalt and mortar sales reaching decade-low levels.
- New figures from the Mineral Products Association (MPA) reveal a continued slump in sales volumes for primary materials in the first quarter of 2024.
- Despite a slight 1.1% increase in primary aggregates sales, severe weather and economic challenges have curbed broader construction activity.
- A marked decline in housing demand, spurred by high interest rates, has particularly impacted mortar and concrete sales.
- There is cautious optimism for stabilisation, yet significant barriers remain for a swift recovery in the sector.
The first quarter of 2024 has manifested a stark decline in the British construction landscape, as evidenced by recent data from the Mineral Products Association (MPA). These figures unveil a concerning trend, with asphalt and mortar sales tumbling to levels unseen since 2013 and 2014, respectively. This decline highlights the cumulative effect of adverse weather conditions and persistent economic difficulties that have beset the industry, further extending project timelines.
In the realm of primary aggregates, there was a modest increase of 1.1% in sales. However, this uptick starkly contrasts with the overall subdued performance across other construction materials. Unrelenting storms and record rainfall at the beginning of the year exacerbated these conditions, affecting productivity and delaying construction schedules. This situation is anticipated to persist into the spring, without a significant recovery surge on the horizon.
The demand for mortar has plummeted by a striking 27.5% compared to its most recent high in the third quarter of 2022. This dramatic fall is primarily attributed to a decrease in housing demand, a consequence of elevated mortgage rates following the October 2022 budget. The downstream effects on new housing projects have been considerably adverse, curbing construction efforts and impacting associated sectors.
Furthermore, ready-mixed concrete sales have reached historically low volumes, driven by diminished activity in house-building. Additional factors include an ongoing contraction in demand for new commercial offices and retail spaces since 2017. The cumulative impact of these declines has reverberated across the construction industry, underscoring a broader trend of waning demand.
Asphalt sales have not been spared this downward trend, slipping to levels last observed over a decade ago, save for a brief downturn during the Covid-19 crisis. This decline is linked to both project delays and funding constraints affecting roadworks, particularly in the National Highways roads programme and local authority budgets.
Support for primary aggregates has been maintained largely due to ongoing major infrastructure efforts, notably the HS2 project. Nevertheless, concerns persist over the lack of significant new infrastructure ventures outside the major rail initiatives. The MPA has emphasised the importance of addressing these issues to stimulate growth, highlighting the need for robust government action to streamline planning and fortify local funding.
The British construction sector remains in a precarious position, with recovery contingent on strategic governmental intervention and policy adjustments.
