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03 August 2020

Sales of heavy-side building materials slumped in second quarter as the economy and construction slowed

The latest statistics released by the Mineral Products Association (MPA) show that sales of heavy-side building materials, including aggregates, ready-mixed concrete (RMC), asphalt and mortar saw unprecedented declines during the second quarter of the year. Aggregates sales volumes were 38% lower, RMC 39% and asphalt 28% on a quarterly basis. The swift closure of housebuilding sites as the lockdown was announced in March resulted in the mortar market suffering an even sharper fall in demand, with sales volumes down by 61% over the quarter. Overall, the impact of the Covid-19 lockdown has been worse than the financial crash between 2007 and 2009.

Regionally, the decline in construction demand was particularly severe in Scotland, where the vast majority of construction sites were ordered to close, bar for some limited essential works. As a result, Scottish sales volumes of aggregates fell by 69% over the quarter, asphalt by 85%, and RMC by 89%. Construction work has now been permitted to resume since 12th June wherever physical distancing can be maintained, suggesting some pent-up demand could be expected over the summer.

Aurelie Delannoy, Director of Economic Affairs at the MPA, cautioned that the contraction seen so far only reflects the direct impact of the lockdown during April and May, not the overall impact of the pandemic and resulting macroeconomic weaknesses. “While there has been a gradual pick-up in activity since mid-May in England and Wales, much of this reflects post-lockdown pent-up demand. The industry therefore remains concerned about the shape, speed and resilience of the recovery over the next few months, particularly order books throughout the autumn and into the winter.”

Nigel Jackson, CEO at MPA, added “The next few months will be critical for all businesses in the mineral products industry, small, medium or large. It is welcome to see Government putting infrastructure, including for public health, at the heart of its recovery plans. It is also refreshing to receive clear recognition of the essentiality of our industry to the economy. Government’s ambition now needs to be put into action; delivery of the planned pipeline of infrastructure projects needs to be accelerated and our industry stands ready to play its part and supply the main materials needed to ‘Build, Build, Build’. Important as it is to ‘build back better’ right now the priority is survival and to get back to levels of activity expected pre-Covid-19.

Figure 1. MPA sales volumes in Great Britain (million tonnes or cubic metres, seasonally adjusted)

 

Table 1. MPA sales volumes in Great Britain (percentage change on previous period, seasonally adjusted)

 

Asphalt

RMC(1)

Crushed rock

Sand & Gravel

Mortar

ONS Construction Output

2018

0.7%

-1.6%

2.5%

1.3%

15.6%

0.0%

2019

-0.8%

-3.9%

-0.7%

-5.4%

-2.3%

1.9%

2019Q3

3.3%

0.8%

2.2%

1.7%

3.3%

0.5%

2019Q4

0.3%

0.5%

4.2%

3.0%

-8.6%

-1.0%

2020Q1

-9.8%

-6.3%

-4.5%

-4.2%

-2.7%

-1.7%

2020Q2

-27.7%

-39.5%

-37.0%

-39.0%

-61.3%

-

(1) RMC is the sum of sales from both fixed & site plants.

Ends.

About the Mineral Products Association:
The Mineral Products Association (MPA) is the trade association for the aggregates, asphalt, cement, concrete, dimension stone, lime, mortar and silica sand industries. With the affiliation of British Precast, the British Association of Reinforcement (BAR), Eurobitume, MPA Northern Ireland, MPA Scotland and the British Calcium Carbonate Federation, it has a growing membership of 520 companies and is the sectoral voice for mineral products. MPA membership is made up of the vast majority of independent SME quarrying companies throughout the UK, as well as the 9 major international and global companies. It covers 100% of UK cement and lime production, 90% of GB aggregates production, 95% of asphalt and over 70% of ready-mixed concrete and precast concrete production. In 2016, the industry supplied £18 billion worth of materials and services to the Economy. It is also the largest supplier to the construction industry, which had annual output valued at £169 billion in 2018. Industry production represents the largest materials flow in the UK economy and is also one of the largest manufacturing sectors. For more information visit: www.mineralproducts.org

For further information, please contact Robert McIlveen at robert.mcilveen@mineralproducts.org. Tel: 0207 963 8000.

 

   
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