The MPA has released the results of its quarterly members’ survey detailing Q1 2024 sales volumes for primary aggregates, asphalt, ready-mixed concrete, and mortar, collectively seen as an important barometer for the construction industry as a whole.
The survey highlights continued challenges within the construction industry, resulting in persistent declines in demand across key markets for mineral products.
Despite a modest increase in primary aggregates sales of 1.1% over the last quarter, the overall trend across all markets monitored remains subdued, reflecting the impact of UK economic stagnation, high interest rates and a diminishing pipeline of new construction projects over the past 18 months.
Extreme weather conditions, including storms and record rainfall, further compounded the situation at the start of 2024, impacting work on construction sites and demand for building materials. This is likely to result in extended project timelines, rather than any significant catch-up in demand during the spring.
Mortar – the cumulative impact of these trends means that mortar sales – critical for bonding bricks, blocks and masonry – have dropped to their lowest volumes since 2014 (excluding covid-impacted Q2 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 Truss-Kwarteng budget debacle in October 2022, which precipitated significant increases in mortgage costs.
Concrete - similarly, ready-mixed concrete sales have plummeted to historically low levels, hit by the contraction in housebuilding, which compounded longer-term weaknesses in demand from new commercial offices and retail projects, which have been subdued since 2017.
Asphalt - the road sector has faced significant cost pressures over the past two years, leading to project delays and cancellations on the National Highways roads programme and strained road funding for local authorities, resulting in asphalt sales falling to levels last recorded more than a decade ago in 2013.
Aggregates - 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.
Commenting on the findings, Aurelie Delannoy, MPA Director of Economic Affairs, 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. The mineral products industry stands ready to supply the essential materials needed.”
