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Construction Product Manufacturing Continues to Increase Sales - From TTA
Construction Product Manufacturing Continues to Increase Sales - From TTA
The results of Construction Products Association’s latest State of Trade Survey show that sales for the construction product manufacturing sector experiences a second straight quarter of growth. In the third quarter of 2024, both heavy side and light side firms reported a quarterly increase in product sales volumes, set against a backdrop of low capacity utilisation and labour cost pressures.
In 2024 Q3, a balance of 55% of heavy side manufacturers reported that sales of construction products increased. This growth brings an end to a prolonged period of contraction since 2022 Q2. Alongside this, 8% of light side manufacturers reported a rise in product sales.
Despite growth over the quarter, heavy side sales were still lower than a year earlier given there has been an ongoing, and significant, reduction in demand from the two largest sectors of construction: private housing new build and repairs, maintenance and improvement (RM&I). Manufacturers on both the heavy side and light side expected growth in sales over the next 12 months. Nevertheless, low capacity utilisation, continued uncertainty over the future strength of demand, and strong labour cost inflation even before the increase in employers’ National Insurance Contributions announced in the Autumn Budget, registered as three of the standout themes affecting business confidence.
Rebecca Larkin, CPA Head of Construction Research said: “The green shoots of recovery have emerged slowly over the last two surveys and appear fairly tentative so far. The sharp falls in construction activity in two key markets for product manufacturers – new build housing and housing RM&I – as well as the cancellation of several large roads projects have had a stark impact on manufacturing operations, with heavy side capacity reined in. Although a return to growth over the next 12 months was widely expected in the Q3 survey, low capacity utilisation, which tends to be due to mothballed production lines, can take time to restart.
“Wages and salaries registered as one of the primary drivers of input cost inflation in Q3. Subsequent announcements in the Autumn Budget of a 6.7% increase in the National Living Wage and the rise in employers’ National Insurance Contributions from next April will only add to headwinds as the construction and product manufacturing recoveries try to gain pace.”
Key survey findings include:
For more information view the latest State of Trade Survey. TTA members can access the document free of charge, which has a value of £100, as part of their TTA membership benefits using the Members’ Area.
The post Construction Product Manufacturing Continues to Increase Sales appeared first on The Tile Association.
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Construction Product Manufacturing Continues to Increase Sales - From TTA
The results of Construction Products Association’s latest State of Trade Survey show that sales for the construction product manufacturing sector experiences a second straight quarter of growth. In the third quarter of 2024, both heavy side and light side firms reported a quarterly increase in product sales volumes, set against a backdrop of low capacity utilisation and labour cost pressures.
In 2024 Q3, a balance of 55% of heavy side manufacturers reported that sales of construction products increased. This growth brings an end to a prolonged period of contraction since 2022 Q2. Alongside this, 8% of light side manufacturers reported a rise in product sales.
Despite growth over the quarter, heavy side sales were still lower than a year earlier given there has been an ongoing, and significant, reduction in demand from the two largest sectors of construction: private housing new build and repairs, maintenance and improvement (RM&I). Manufacturers on both the heavy side and light side expected growth in sales over the next 12 months. Nevertheless, low capacity utilisation, continued uncertainty over the future strength of demand, and strong labour cost inflation even before the increase in employers’ National Insurance Contributions announced in the Autumn Budget, registered as three of the standout themes affecting business confidence.
Rebecca Larkin, CPA Head of Construction Research said: “The green shoots of recovery have emerged slowly over the last two surveys and appear fairly tentative so far. The sharp falls in construction activity in two key markets for product manufacturers – new build housing and housing RM&I – as well as the cancellation of several large roads projects have had a stark impact on manufacturing operations, with heavy side capacity reined in. Although a return to growth over the next 12 months was widely expected in the Q3 survey, low capacity utilisation, which tends to be due to mothballed production lines, can take time to restart.
“Wages and salaries registered as one of the primary drivers of input cost inflation in Q3. Subsequent announcements in the Autumn Budget of a 6.7% increase in the National Living Wage and the rise in employers’ National Insurance Contributions from next April will only add to headwinds as the construction and product manufacturing recoveries try to gain pace.”
Key survey findings include:
- A balance of 55% of heavy side firms and 8% of light side firms reported that construction products sales rose in 2024 Q3 compared with 2024 Q2
- Comparing 2024 Q3 with 2023 Q3, 27% of heavy side manufacturers reported a decrease in sales, on balance
- 80% of heavy side manufacturers and 50% of light side manufacturers anticipated a rise in sales over the next 12 months
- 83% heavy side manufacturers and 42% of light side manufacturers cited ‘demand’ as the key concern for sales over the next 12 months
- Heavy side manufacturers reported capacity utilisation at 80% or lower, the first time below this threshold in the survey’s history
- All heavy side manufacturers and two-thirds of light side manufacturers reported an increase in wages and salaries compared to a year earlier
For more information view the latest State of Trade Survey. TTA members can access the document free of charge, which has a value of £100, as part of their TTA membership benefits using the Members’ Area.
The post Construction Product Manufacturing Continues to Increase Sales appeared first on The Tile Association.
Posted on the UK Tiling Forum automatically using RSS Feeds to Tilers Forums Any company can have their news fed to the forum like this via their own blog. Get in touch with [email protected] if you'd like to chat about it.
Continue reading...