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News Mineral Products Association warns of slow UK demand growth for construction products

Mineral Products Association warns of slow UK demand growth for construction products

Written by Global Cement staff 17 May 2021
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UK: The Mineral Products Association (MPA) has described first-quarter building materials demand as ‘resilient’ in 2021 despite renewed coronavirus lockdown restrictions, on-going supply chain disruptions and wet winter weather. Following a recent survey the association says that continued housing activity – with increased home improvements – and an acceleration in infrastructure work, driven by a new roads programme and the start of the HS2 high-speed railway, drove minor growth during the quarter. Ready-mix concrete demand rose by 2% year-on-year, while mortar demand fell by 7% during the period. The MPA said that both products are mostly used in the early stages of construction, thus serving as a barometer for construction activity ahead in the short term.

The MPA reports that since September 2020, construction growth has remained close to zero, whilst new contract awards have been ’weak’ since May 2020. The downward trend of housing-led mortar demand in the first quarter of 2021 continues a pre-pandemic decline since mid-2018. Thus, housing activity growth is considered unlikely to continue beyond the completion of existing projects ahead of the end of a land tax holiday and a deadline in a first time buyers loan scheme. The MPA described the slow growth of ready-mixed concrete demand as ‘concerning.’ Low housing activity and few new commercial projects compounded the difficult recovery: non-infrastructure projects normally generate 60% of demand. Ready-mix concrete producers rely on London and the South East region for over 30% of sales. First-quarter volumes were 9% below the previous five-year average, despite three consecutive quarters of growth since the first coronavirus lockdown in the first half of 2020.

Director of Economics Affairs Aurelie Delannoy said, “Mineral products manufacturers are busy supplying post- lockdown pent-up demand, particularly for domestic activity such as landscaping, repair and maintenance and home improvements, as well as infrastructure projects.” She added “The outlook for this year and next is also positive, but the stakes are high. Any optimism assumes activity is not disrupted by renewed outbreaks of Covid-19 and, most importantly, relies on the government delivering on its planned infrastructure commitments. MPA members tell us they are yet to see a more clear-cut pick-up in new house building, whilst any recovery in commercial development is expected to remain muted given the current reticence for major new investments.”

Last modified on 19 May 2021
Published in Global Cement News
Tagged under
  • UK
  • Mineral Products Association
  • MPA
  • market
  • survey
  • concrete
  • mortar
  • residential
  • GCW506

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