The Construction Products Association’s recent survey reveals a hopeful recovery in product sales for Q2 2024.
- Both heavy and light side manufacturers report increased sales volumes, though demand and labour concerns persist.
- Heavy side manufacturing sees its first growth in two years, with 30% reporting increased sales.
- Despite the quarterly growth, year-over-year comparisons illustrate ongoing market challenges.
- Positive 12-month outlooks exist, but demand and labour availability remain significant concerns.
The Construction Products Association (CPA) has released its latest state of trade survey, showing positive signs of recovery in the construction product manufacturing sector for the second quarter of 2024. A commendable rise in sales volumes was noted by both heavy side and light side manufacturers, yet caution remains as uncertainties surrounding demand and labour availability persist.
For the first time since the second quarter of 2022, a balance of 30% of heavy side manufacturers reported an increase in sales. This marks a significant milestone for the sector, as it struggles to rebound from extended periods of stagnant Gross Domestic Product (GDP) growth compounded by consistently high interest rates, which have severely depressed demand in private housing and Repairs, Maintenance, and Improvement (RMI) sectors.
In tandem with the heavy side’s success, 13% of light side manufacturers also experienced sales growth this past quarter. Conversely, comparisons with the same quarter the previous year highlight ongoing difficulties, with a 30% decrease in sales on balance among heavy side manufacturers.
Looking forward, both sectors exhibit optimism, with 56% of heavy side and 23% of light side manufacturers expecting increased sales over the next 12 months. Nevertheless, demand remains a critical concern, as reflected by 57% of heavy side and 49% of light side manufacturers pointing to demand as a key obstacle.
Another pressing industry issue, noted by the CPA, is the record-high concern over labour availability. Among heavy side manufacturers, 29% cite this as a significant challenge, with light side manufacturers closely following at 27%. This comes amidst increases in wages and salaries across the board, further exacerbating the costs for manufacturers.
The CPA survey highlights a cautious optimism within the construction manufacturing sector, tempered by persistent demand and labour challenges.
