Demand for bricks, blocks, precast concrete products, cast stone and natural stone is reliant on factors such as levels of activity and output in the housebuilding and wider construction sectors, public and private sector investment, levels of consumer and business confidence and spending, as well as wider economic factors both within the UK and globally.
The market has experienced solid levels of growth in recent years. Growth has been underpinned by recovery and rapid recent growth in the housebuilding sector as well as higher levels of output from key non-residential sectors including infrastructure, commercial offices and entertainment & leisure. Non-residential output remains somewhat volatile, particularly since the EU vote which introduced a level of uncertainty affecting both business confidence and levels of investment.
Despite recent growth levels, there are several negative factors impacting the market. The market has experience supply issues particularly for bricks and blocks. These issues have increased the importance of partnerships and supply agreements. Furthermore, in response to supply issues have led to an increase in local capacity and a surge in imports to fill the gaps. The market also continues to suffer from inflationary pressures. This has been exacerbated by the fall in value of Sterling as a result of the Brexit vote which has affected raw material prices, and suppliers are struggling with higher import costs of many products and materials being imported from the EU.
Future demand will be underpinned by sustained growth in residential output, although the rate of growth, in terms of both newbuild and RMI, is expected be slower than that experienced 2013-16. The individual product categories discussed in this report are all expected to continue growing 2018-22, however the annual rates of growth are likely to be lower than those experienced 2013-16, but are expected to rise marginally 2021-22, once the Brexit-related uncertainties have been resolved and the market begins to regain some stability.