Gross sales of “heavy” development supplies fell throughout the third quarter of this yr after an unbroken two years of progress, with the state of affairs set to worsen.
The Development Merchandise Affiliation’s newest State of Commerce Survey confirmed a damaging stability of 12% within the variety of corporations reporting a fall in gross sales or a rise between July and September 2022.
The final time the determine for heavy supplies (these used early within the development course of reminiscent of concrete, metal and aggregates) was in damaging territory was throughout the second quarter of 2020.
The determine for “gentle” development supplies (reminiscent of inner fittings) was constructive, however at 17% was additionally at its lowest degree for the reason that second quarter of 2020.
CPA senior economist Rebecca Larkin stated: “The easing in producers’ gross sales and the rising weak spot in development output in Q3 is now joined by broader deterioration within the UK economic system.”
In the meantime, on stability, 53% of heavy aspect corporations anticipate a lower in gross sales over the following 12 months.
Of firms within the gentle aspect of the merchandise market, a stability of 13% of corporations anticipated a decline.
Larkin stated: “With a recession on the playing cards for 2023, it ought to come as no shock that development product producers are anticipating a contraction in gross sales and exercise.
“This combines with the robust charges of enter price inflation that already pervade the availability chain and have begun to delay decision-making on development initiatives.”
Nevertheless, she added {that a} clearer image of the UK authorities’s spending plans might assist raise the financial gloom.
Weak spot in hiring intentions was reported by each heavy aspect and lightweight aspect producers.
The figures referring to price inflation confirmed some enchancment.
Whereas 88% of heavy and 83% of sunshine producers reported price will increase throughout the previous quarter, this was down from 100% for the primary time in a yr.
