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Sat February 24 2024

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Demand for building products still declining

12 Feb Sales of heavy building materials have now been in decline for six consecutive quarters and are expected to keep falling for at least another year.

The Construction Products Association’s latest state of trade survey for the fourth quarter (Q4) of 2023 showed that manufacturers ended last year with a further fall in construction product sales on both the heavy side and light side.

Q4 2023 was the sixth consecutive quarter of decline for heavy side manufacturers and the second fall for those on the light side.

Manufacturers anticipate that sales will continue to decline over the next 12 months.

The backdrop for costs was shown to be improving, however, with manufacturers reporting a continued easing in cost inflation. Price pressures were lower for raw materials, fuel and energy, which had all been major contributors to inflation over the last couple of years. Nevertheless, manufacturers reported continued upward pressure from wages & salaries.

CPA head of construction research Rebecca Larkin said: “Manufacturers had a challenging end to 2023 and there appears little to rally expectations for growth this year. Falls in new construction orders since the end of 2022 have now begun to filter through into lower construction activity, particularly in housing, commercial offices and warehouses and factories in the industrial sector. With flatlining GDP growth, a step-change in interest rates and build costs, and emerging risks around delays and cost rises related to the Red Sea shipping disruptions, it should come as no surprise that demand was flagged as the key concern for construction product manufacturing activity in 2024.”

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