The deteriorating market for aggregates, concrete, asphalt and mortar has unfolded against a backdrop of unfavourable economic conditions, escalating costs, rising interest rates and a diminishing pipeline of new construction projects.
Primary aggregates sales volumes in Great Britain recorded a 5% annual decline, ready-mixed concrete sales dropped by 6.2%, asphalt by 6.6%, and mortar by 15%.
Demand from other major construction markets is also subdued, particularly from commercial high-rise and highway projects.
Sales of ready-mixed concrete declined by 6.2% in 2023 to total of 13.8 million cubic metres. This is the second lowest volume recorded since 1964 – 60 years ago. The lowest point (13.4 million cubic metres) was in covid-impacted 2020 when the nation shut down for several weeks.
The demand for asphalt, split approximately 60/40 between road and non-road construction, dropped by 3.6% in the fourth quarter of 2023 and by 6.6% for the full year.
At 20.4 million tonnes, the total volumes of asphalt sales is at a decade low, illustrating the weakness caused by delays and cancellations of National Highways’ road schemes, tight council budgets impacting the delivery of local road upgrades and maintenance, and flagging activity in other areas of construction.
There are some pockets of growth, however. Construction of the new Birmingham-London railway line has supported demand for primary aggregates as fill materials, although not enough to fully offset the reduction in demand in other markets, resulting in a 5% decrease in total aggregates sales volumes in 2023.
MPA director of economic affairs Aurelie Delannoy said: “MPA producer members’ insight continues to paint a bleak picture for construction in 2024. New projects in the pipeline are stalling due to cost pressures, planning challenges and a poor economic and investment backdrop. This is hitting all facets of new construction work, the most prominent of which has been in private housing. Unfortunately, a meaningful rebound in house-building seems elusive at present, amid tight financial conditions for households who are faced with high borrowing costs and reduced affordability.”
MPA chief executive Jon Prichard added: “While we retain confidence in the long-term demand, it is clear that we are facing a significant dip in the market that will be challenging for our members.”
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