The UK-based Mineral Products Association (MPA) has released the results of its latest industry sales survey, revealing a second consecutive annual drop in sales volumes of heavy-side building materials in Great Britain. 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, says the MPA.
The quarterly survey, an important bellwether of wider construction activity, exposes the challenges faced by producers of heavy-side building materials. Primary aggregates sales volumes in Great Britain recorded a five per cent annual decline, ready-mixed concrete dropped by 6.2 per cent, asphalt by 6.6 per cent and mortar by 15 per cent.
MPA producer members are grappling with a prolonged weakening in demand from the construction industry, with recent months witnessing a noticeable acceleration in the slump, particularly in housebuilding. Sales of mortar, critical for bonding bricks, blocks and masonry, fell by 13.1 per cent in the 4Q23 alone, reaching 2.3Mt in 2023 — 15 per cent lower than in 2022. Official ONS statistics show a 21 per cent decline in total housing output in Great Britain from October 2022 to November 2023, with mortar sales dropping by 31 per cent over that period.
Demand from other major construction markets is also subdued, particularly from commercial high-rise and highway projects. Expressing concerns about the year ahead, Aurelie Delannoy, director of economic affairs at the MPA, 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 housebuilding seems elusive at present, amid tight financial conditions for households who are faced with high borrowing costs and reduced affordability.”
However, there are some pockets of growth, driven primarily by on-the-ground progress in major infrastructure projects, including HS2 Phase 1. This has supported demand for primary aggregates as fill materials, although not enough to fully offset the reduction in demand in other markets.
