The Mineral Products Association has remarked that a disappointing quarter for UK producers of mineral products raises concerns that widespread cost inflation for raw materials, energy and labour is starting to negatively impact the sector.
Demand for mineral products, edged lower in the 2Q22, with sales volumes down on a quarterly basis, according to the MPA’s latest industry survey. Tonnages of ready-mix were 7.4 per cent lower than in the 1Q22, 9.8 per cent lower for aggregates and asphalt sales fell by six per cent compared to the previous quarter. Mortar sales were also lower than in the 1Q22 by 3.4 per cent, albeit from a high base and volumes remain supported by housebuilding activity, said the MPA.
Survey data from MPA producer members indicates that demand for these materials dropped off markedly from June, with the extended bank holiday and the rail strikes said to have caused some disruption.
However, the main concern is that widespread cost inflation throughout the construction supply chain is starting to negatively impact on construction demand, possibly indicating the start of a more prolonged downturn. All mineral products markets, from the extraction of aggregates to the manufacture of downstream products, have been exposed to significant cost increases for raw materials, energy and labour in the past year.
Aurelie Delannoy, MPA director of economic affairs, cautions that the recent weakness in mineral products sales, if continued over the second half of the year, would make a contraction unavoidable for the year as a whole for all mineral products monitored.
