The construction industry has experienced seven consecutive quarters of declining sales in heavy building materials. Despite this downturn, light side materials show promising growth. Industry experts remain optimistic about future sales increases. Challenges include weak demand in house building and fewer commercial projects. Expected interest rate reductions could revitalise the housing market.
Sales of heavy building materials, such as bricks, steel, and concrete, have seen a decline for almost two years, now marking the seventh consecutive quarter of falling sales according to the latest Construction Products Association (CPA) survey. In the first quarter of 2024, more heavy side manufacturers reported declines rather than increases in sales, with a significant 36% balance indicating the overall trend towards contraction in this sector.
Conversely, the sales of light side materials, typically associated with building refurbishment, have witnessed a resurgence. The CPA survey indicated a 24-point balance increase in light side product sales, signalling a return to growth after two quarters of decline. This uptick highlights ongoing demand in sectors such as office refurbishment and energy efficiency work, which have remained active despite broader economic challenges.
Looking ahead, there is a notable anticipation of increased sales in the coming 12 months, with 79% of heavy side and 59% of light side manufacturers expressing optimism. This marks the highest level of expected growth since 2022, reflecting a cautious yet hopeful outlook amidst fluctuating market dynamics.
Rebecca Larkin, CPA’s head of construction research, attributed the dip in heavy side sales to reduced activity in house building and a lack of large-scale home improvements and commercial projects. She noted that wet weather had further dampened demand, contrasting with the steady activity in sectors like office renovations and energy-efficient projects that boost light side sales.
Larkin also pointed out that anticipated reductions in interest rates might stimulate the housing market and boost confidence in pursuing large commercial and industrial projects. However, she cautioned that the forecast recovery might only be gradual, echoing broader macroeconomic predictions.
The construction industry’s outlook hinges on anticipated interest rate cuts, potentially revitalising both residential and commercial market sectors.
