Material prices continue their downward trend, as reported by the government, indicating a shift from post-pandemic highs. This decline is largely apparent across various sectors, with significant decreases observed in non-housing new-build markets, while some materials still show substantial price increases.
- A government report highlights a 0.3% drop in material prices from July and a 1.1% decrease compared to last year, indicating an overall decline from previous peaks.
- Non-housing new-build market experiences the largest cost reductions, with prices falling by 0.6% over the past month and 2.1% over the year.
- While some materials like flexible pipes have surged significantly by 17.4%, others such as gravel and fabricated steel have seen notable price reductions.
- Despite the decrease in prices, there has been a marked decline in sales for certain materials, although brick deliveries have shown a promising rise.
According to recent government analysis, material prices have continued their downward trajectory in August. The Department for Business and Trade (DBT) reports a 0.3 per cent decrease from July and a more pronounced 1.1 per cent drop when compared to the same period last year. This trend suggests that material costs are gradually receding from their post-pandemic peaks. The non-housing new-build sector exhibits notable reductions, with material costs reducing by 0.6 per cent over the previous month and a substantial 2.1 per cent decline over the past year.
Material categories reflect mixed pricing dynamics. Although some sectors report decreases, certain materials have experienced marked price increases. Notably, flexible pipes and fittings have risen by 17.4 per cent over the past year, the most substantial increase among those tracked by the DBT. In contrast, precast concrete blocks, bricks, tiles, and flagstones have seen a smaller but significant rise of 4.9 per cent. Meanwhile, materials like gravel, sand, clays, and kaolin, subject to the aggregates levy, have seen the most significant decrease, plunging by 10.8 per cent. Similarly, fabricated structural steel and steel concrete reinforcing bars have depreciated by 7.3 per cent and 4.3 per cent respectively.
However, falling prices have not been accompanied by increased sales. Ready-mixed concrete sales experienced a sharp fall of 8.6 per cent in the second quarter relative to the first, and a substantial 22.8 per cent decline compared to the same period in 2023. This decline in sales is echoed in the sand and gravel market, which suffered a decrease of 6.8 per cent from the first quarter and 16 per cent when evaluated year-over-year, continuing a long-term downward trend since the 2008 financial crisis, as noted by the DBT.
Nevertheless, not all trends are negative. Brick deliveries, for example, have shown resilience, marking a deviation from broader trends by increasing 4.7 per cent in August compared to July, following a 7.4 per cent rise in the preceding month. This positive movement in brick supplies provides a glimmer of optimism amidst otherwise challenging conditions for material sales.
The analysis underscores the complex nature of the construction materials market, characterised by varying trends across different materials and sectors.
