Falling demand hits construction product manufacturers’ sales

Latest News Mon, Feb 12, 2024 8:04 AM

The Construction Products Association’s latest State of Trade Survey for 2023 Q4 showed that manufacturers ended last year with a further fall in construction product sales on both the heavy side and light side – the sixth consecutive quarter of decline for heavy side manufacturers and the second fall for those on the light side.

Manufacturers anticipate sales will decline over the next 12 months, citing a clear concern over the weak demand expected in 2024.

In 2023 Q4, a balance of 63% of heavy side manufacturers reported that sales of construction products decreased, marking the sixth consecutive quarter of decline and the weakest performance since 2020 Q2, at the height of the pandemic. Alongside this, 40% of light side manufacturers also reported a fall in product sales. This was the second quarterly decline but, equally, the lowest balance recorded since activity was paused during the early pandemic restrictions.

Looking to the next 12 months, demand was cited by 71% of heavy side manufacturers and 80% of light side manufacturers as the factor most likely to constrain growth during 2024. Consequently, 11% of heavy side manufacturers and 15% of light side manufacturers anticipated a fall in sales over this year.

The backdrop for costs was shown to be more favourable, 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.

Rebecca Larkin, CPA Head of Construction Research 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.”

Key survey findings include:

  • A balance of 63% of heavy side firms and 40% of light side firms reported that construction products sales fell in 2023 Q4 compared with Q3
  • This was the sixth straight quarter of decline for the heavy side and second for the light side
  • 11% of heavy side manufacturers and 15% of light side manufacturers anticipated a fall in sales over the next 12 months
  • 71% heavy side manufacturers and 80% of light side manufacturers cited ‘demand’ as the key concern for sales over the next 12 months
  • Cost balances continued to moderate but wages & salaries were the strongest cost pressures for both heavy side and light side manufacturers

Featured News

Specification news
Augmented Reality tools in use at 1 Broadgate and...

At 1 Broadgate in London and Kingsway Hospital in Derby, teams from Sir Robert...

Read More >>

Specification news
BAM starts work on The Typhoo Tea Factory in Digbeth...

BAM has started work on transforming the former Typhoo Tea factory into BBC’s new...

Read More >>

BUILDING PRODUCT LIBRARY - LATEST BROCHURES

Squash Court Flooring Brochure

Squash Court Floorin...
By Junckers Limited

Download Now >>

Junckers Acoustics Floor System Brochure

Junckers Acoustics F...
By Junckers Limited

Download Now >>

Attraction® - Brochure Brochure

Attraction® - Brochu...
By Gerflor

Download Now >>

Care Homes Specification Guide - Interactive Brochure Brochure

Care Homes Specifica...
By Gerflor

Download Now >>

Cityscene & Brickworks - Gradus - Brochure Brochure

Cityscene & Brickwor...
By Gerflor

Download Now >>

BUILDING PRODUCT DIRECTORY - LATEST PRODUCTS

Ei1025 Environmental Sensor
Ei1025 Environmental Sensor

Discreet and secure, the Ei1025 Environmental Sensor can be placed throughout a property to monitor...

Read More >>

Ei1000G SmartLINK Gateway
Ei1000G SmartLINK Gateway

The Gateway and Cloud portal use Aico’s SmartLINK technology to bring together data from all...

Read More >>

Ei3030 Multi-Sensor Fire and Carbon Monoxide Alarm
Ei3030 Multi-Sensor Fire and Carbon Monoxide Alarm

The Ei3030 is a multi-sensor Fire & Carbon Monoxide (CO) Alarm. Containing our proven and dependable...

Read More >>

CONSTRUCTION VIDEOS - LATEST VIDEOS

Forma aluminium column casings for Winchester College
Forma aluminium column casings for Winchester College

In progressive and dynamic business sectors, such as construction, it’s natural to be forward...

Watch Now >>

Decorative metal bulkheads & column casings for Tesco Extra, Birmingham
Decorative metal bulkheads & column casings for Tesco Extra, Birmingham

Decorative aluminium horizontal bulkheads more than 100 metres long have been supplied and installed...

Watch Now >>

Vecta building linings for the perfect finish
Vecta building linings for the perfect finish

More than 150 sq.m of Vecta aluminium wall lining and a feature bulkhead have been manufactured and...

Watch Now >>