The MPA has released the results of its quarterly members’ survey detailing 2024 first quarter (Q1) sales volumes for primary aggregates, asphalt, ready-mixed concrete and mortar.
Despite a modest increase in primary aggregates sales of 1.1% over the last quarter, the overall trend across all markets monitored remains subdued. Storms and record rainfall impacted construction productivity at the start of 2024, in addition to already difficult economic conditions.
The MPA said that this is likely to result in extended project timelines, rather than any significant catch-up in demand during the spring.
The cumulative impact of these trends means that mortar sales have dropped to their lowest volumes since 2014 (excluding Covid-impacted spring 2020), with a 27.5% decline in demand since the most recent peak in Q3 2022. This is attributed to falling housing demand and the knock-on implications for new housing construction since the October 2022 budget that triggered mortgage interest rate hikes.
Ready-mixed concrete sales have also plummeted to historically low levels, hit by the contraction in house-building, which compounded longer-term weaknesses in demand from new commercial offices and retail projects that have been subdued since 2017.
Project delays and cancellations on the National Highways roads programme, and strained road funding for local authorities, have resulted in asphalt sales falling to levels last recorded more than a decade ago in 2013 (again, bar the covid blip).
Demand for primary aggregates has been supported by the requirement for bulk fill materials on major infrastructure projects, particularly from HS2, but the lack of significant new infrastructure projects outside of the country’s only major rail scheme remains a concern, the MPA said.
MPA director of economic affairs Aurelie Delannoy said: “The latest survey results underscore the persistent challenges faced by the mineral products sector in Great Britain. Weak economic growth, high inflation, high interest rates and construction project delays have collectively contributed to subdued demand across all major areas of construction. There are signs that construction activity may be beginning to stabilise, but lingering concerns over high costs, uncertainties surrounding future construction plans, and rising contractor failures are expected to impede any significant recovery in mineral products sales until at least 2025.
“As the general election approaches, MPA urges all parties to prioritise a robust return-to-growth plan, anchored by the timely delivery of the infrastructure pipeline. Streamlining planning processes for housing is important, but the government must also tackle the significant cost pressures affecting infrastructure projects and local spending. Investing in local road repairs, upgrading transport networks, and delivering the housing, schools, hospitals, and energy infrastructure the UK economy needs are critical for both short-term and long-term growth, as well as advancing our goals to address climate change and sustainability.”
