Construction products

Mineral Products Association warns of weak growth in UK demand for construction products

UK: The Mineral Products Association (MPA) described first-quarter demand for building materials as “resilient” in 2021 despite renewed coronavirus lockdown restrictions, ongoing supply chain disruptions and wet winter conditions. Following a recent survey, the association indicates that the continuation of housing activity – with an increase in housing improvements – and an acceleration of infrastructure works, driven by a new road program and the start-up of the HS2 high-speed line, resulted in minor growth during the quarter. Demand for ready-mixed concrete increased 2% year-on-year, while demand for mortar declined 7% over the period. The MPA said the two products are mainly used in the early stages of construction, serving as a barometer for short-term construction activity.

The MPA reports that since September 2020 construction growth has remained close to zero, while new contract awards have been “weak” since May 2020. The downward trend in demand for mortar for housing in the first quarter 2021 has continued a pre-pandemic decline since mid-2018. Thus, growth in housing activity is unlikely to continue beyond the completion of existing projects before the end of a property tax holiday and a deadline in a home equity loan program. to the property. The MPA described the slow growth in demand for ready-mixed concrete as “worrying”. Weak real estate activity and few new commercial projects worsened the difficult recovery: non-infrastructure projects normally generate 60% of demand. Ready-mix concrete producers rely on London and the South East region for more than 30% of their sales. First quarter volumes were 9% lower than the previous five-year average, despite three consecutive quarters of growth since the coronavirus first lockdown in the first half of 2020.

Director of Economic Affairs Aurélie Delannoy said: “Manufacturers of mineral products are busy meeting pent-up post-containment demand, especially for domestic activities such as landscaping, repair and maintenance and home improvement, as well as infrastructure projects. ” She added: “The outlook for this and next year is also positive, but the stakes are high. Any optimism assumes that business is not disrupted by new outbreaks of Covid-19 and, more importantly, hinges on the government meeting its planned infrastructure commitments. MPA members tell us they have yet to see a sharper recovery in new home construction, while any resumption in business development is expected to remain low-key given the current reluctance to major new investments. “

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