SUMMARY OF REPORT CONTENTS

                     UK Market for Facing Bricks, % Share of End Use Sector

                                           by Area Installed (2010)

The UK market for bricks declined to an estimated £381 million in 2009, with manufacturers’ sales at their lowest level since the start of the decade. Both production and sales/delivery figures improved in 2010, with our estimates for the full year indicating that UK net supply reached some £395 million, and while we expect a further rise this year, with prices increases already scheduled for Spring, it is unlikely that the market will reach pre-recession figures in the short term.

Facing bricks are estimated to account for around 35% of the total UK wall cladding market, however brick volumes used in this application have been in long term decline. Around 13.7 million square metres were used in cladding in 2009, a 30% fall from the estimated 17.8 million square metres in 2008. This long term decline was exacerbated by the recession, and the use of facing bricks by area installed, as shown in the table below, fell by almost half between 2007 and 2009.

Product mix has remained relatively consistent for over two decades, with facing bricks accounting for the bulk of sales (79%), common bricks for 12%, and engineering bricks for 9%. An estimated 45% of facing bricks are used in newbuild housing, with 20% used in commercial and public sector applications, and housing RMI and industrial applications accounting for 30% and 5% respectively.

UK sales of aggregate concrete blocks rose steadily between 2002 -2007, buoyed by a strong housing market and high levels of commercial construction activity and government spending on public housing projects. However, the recession and subsequent falls in the above markets led to estimated declines in market value of 30% and 16% in 2008 and 2009 respectively. There has been a further decline in 2010, albeit significantly less pronounced, of just 2%, and we estimate the value of the market to be around £408 million.

Quarrying of indigenous stone has been in long-term decline, and imports now account for over half of natural stone sales in the UK. In value terms, the market for natural building stone fell by around 10% in 2010, and was estimated at around £87 million.

The value of the UK cast stone market (building blocks and cladding), is broadly estimated to be worth around £5-6 million (MSP).

Sales of bricks and pre-cast concrete blocks are set to improve in 2011, by 6% and 1% respectively, although the market for natural and cast stone is likely to decline by 4% in 2011 and a further 4% in 2012.

Growth to 2015 – for all product sectors – is likely to be moderate and our estimates indicate that by 2015 the market for bricks will be worth £471 million, the market for pre-cast concrete blocks £446 million and natural and cast stone building blocks some £90 million.