Falling demand hits construction product manufacturers’ sales
Posted: Tuesday, April 2nd, 2024
The Construction Products Association’s latest State of Trade Survey for 2023 Q4 showed that manufacturers ended last year with a further fall in construction product sales on both the heavy side and light side – the sixth consecutive quarter of decline for heavy side manufacturers and the second fall for those on the light side. Manufacturers anticipate sales will decline over the next 12 months, citing a clear concern over the weak demand expected in 2024. In 2023 Q4, a balance of 63% of heavy-side manufacturers reported that sales of construction products decreased, marking the sixth consecutive quarter of decline and the weakest performance since 2020 Q2, at the height of the pandemic. Alongside this, 40% of light-side manufacturers also reported a fall in product sales. This was the second quarterly decline but, equally, the lowest balance recorded since activity was paused during the early pandemic restrictions. Looking to the next 12 months, demand was cited by 71% of heavy-side manufacturers and 80% of light-side manufacturers as the factor most likely to constrain growth during 2024. Consequently, 11% of heavy-side manufacturers and 15% of light-side manufacturers anticipated a fall in sales over this year. The backdrop for costs was shown to be more favourable, however, with manufacturers reporting a continued easing in cost inflation. Price pressures were lower for raw materials, fuel, and energy, which had all been major contributors to inflation over the last couple of years. Nevertheless, manufacturers reported continued upward pressure from wages & salaries.
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