The resurgence of housing demand has positively impacted sales of structural materials for the first time since 2022.
- A survey by the Construction Products Association highlighted a 30% increase in sales for heavy-side material manufacturers from April to June 2024.
- Despite the quarterly improvement, a year-on-year decline persists, with 30% of heavy-side manufacturers reporting decreased sales compared to the previous year.
- Wages and salaries have increased in the industry, despite persistent challenges in supply and demand.
- Interest rate cuts are anticipated to stimulate private housing construction, yet obstacles remain.
In the second quarter of 2024, a revival in the housing market spurred growth in the sales of structural materials, reversing a downward trend that persisted since the summer of 2022. According to a recent survey conducted by the Construction Products Association (CPA), 30 per cent of the manufacturers surveyed indicated an increase in sales of heavy-side products—comprising aggregates, cement, and steel—over the previous quarter.
Light-side material manufacturers, which typically come into play later in the construction process, saw a more modest increase, with 13 per cent reporting improved sales between the first and second quarters. Rebecca Larkin, the CPA’s head of construction research, remarked on the optimistic shift after an extended period of declining sales, particularly in the heavy sector, which hints at nascent recovery within the industry.
However, this recent uptick in quarterly sales figures did not suffice to alter the pervasive annual trend, where 30 per cent of the heavy-side manufacturers continued to experience a decrease in sales compared to the same period in the preceding year. Larkin was unsurprised by these figures, attributing them to the prolonged weakness among product manufacturers which correlated with a sluggish residential construction sector.
Despite these mixed signals, all surveyed manufacturers reported an increase in wages and salaries compared to last year, reflecting ongoing challenges despite the recent sales uplifts. Moving forward, the outlook among manufacturers remains cautiously optimistic, with 56 per cent of heavy-side and 23 per cent of light-side manufacturers anticipating increased sales in the coming months.
Larkin suggested that interest rate cuts could catalyse a further rebound in private housing construction, as well as in repairs, maintenance, and improvements. Nevertheless, she acknowledged that both supply and demand challenges continue to pose significant hurdles to sustained recovery in the sector.
The construction materials industry displays early signs of recovery, yet significant challenges remain.
