Manufacturers’ trade body warns that cost and supply pressures are expected to continue for some time with the full impact of higher energy prices yet to be felt on the sector
Sales of construction products increased for a fifth consecutive quarter up to September, despite continued cost pressures and logistics issues, according to the Construction Products Association (CPA).
A State of Trade Survey from the association, which looked at industry performance for the third quarter of 2021, concluded that both manufacturers of heavy and light side goods have seen sales increase by 44 per cent and 26 per cent respectively over the previous three months.
The CPA added, “Both balances fell from those recorded in the previous quarter, however.”
Just over half of heavy side manufacturers and two thirds of light side producers surveyed by the CPA said they expected sales growth to continue over the next 12 months. These predictions were based on a pipeline of new infrastructure projects as well as private housing work and repair, maintenance and improvement jobs, according to the association.
One major development identified by the CPA during the third quarter was the growing issue of cost pressures that have intensified for fuel, energy wages and salaries. A shortage of skilled and unskilled labour was also identified as a result of these issues.
CPA economist Amandeep Bahra noted that product sales were up across the construction product manufacturing sector, despite supply issues resulting from factors such as Covid-19 and the Brexit withdrawal agreement.
Ms Bahra said there was some optimism from manufacturers about the prospect of further sales growth over the next 12 months based on the survey’s findings.
She added, “However, the recent surge in global energy and commodity prices have pushed up energy and fuel costs for manufacturers. All firms surveyed reported an annual increase in fuel costs, whilst the balance citing higher energy costs hit a four-year high for energy-intensive heavy side manufacturers and a nine-year high for light side manufacturers.”
“This comes as raw materials and wages & salaries continue to put upward pressure on input costs and with a record high proportion of heavy side firms operating at over 90 per cent capacity, cost pressures are unlikely to abate any time soon, especially, as the full impact of rising energy prices is yet to be felt.”