Construction products

Building products market slows – Investors’ Chronicle

Manufacturers of building products posted an eighth straight quarter of sales growth in the three months to June, but the rise was the slowest since the start of the current campaign following the second quarter 2020 shutdowns .

The balance of companies reporting growth in the latest Construction Product Association (CPA) survey fell to 30% for heavy manufacturing companies and 17% for light companies, from 43% and 50%, respectively, in the first quarter. .

Companies in the sector were also optimistic about its prospects, with customer budgets coming under pressure due to rising inflation.

According to the Department of Business, Energy and Industrial Strategy, prices for building materials are outpacing inflation, rising 27.2% in the year to May. They are expected to rise further, with 78% of heavy manufacturers and 94% of light companies indicating that they expect costs to continue to rise.

“In recent quarters, manufacturers of building products have reported escalating inflationary pressures on fuel, energy, raw materials and wages,” said Rebecca Larkin, senior economist at the CPA.

“Added to this, there are early reports that higher costs further down the supply chain for transport, insurance, reverse charge VAT and removal of the red diesel rebate are starting to materialize. translate into lower confidence and delayed decision-making for new construction projects.”

In May, the ACP forecast construction sector growth to slow to 2.8% this year from 12.7% in 2021 as inflation stifles demand, particularly in the repair, construction and construction market. maintenance and improvement (RMI).

Earlier this month, brokerage Shore Capital said Marshall’s (MSLH) the shares would be affected by weaker demand for RMI as it accounts for around 20% of the group’s sales. A prolonged recession in the RMI “could also impact Howden (HWDN) and Travis Perkins (TPK)“, he added.

Marshalls said last week that its first-half sales are expected to be 37% higher following its acquisition of tile maker Marley.

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