Building material prices stable despite decline in construction output

Deliveries of key building materials, such as concrete blocks, sand and gravel and ready-mixed concrete, fell drastically in July, according to the latest Government figures.

While some materials, like bricks, experienced a small uptick in deliveries (up 1.4% in July 2024), overall, the industry has struggled with supply chain disruptions.

Here we take a look at the latest updates and statistics to see how it might affect your project and how much it costs to build a house.

Brick and block deliveries continue their downward trend

Concrete block deliveries fell sharply by 15.1% from July 2023 to July 2024, continuing a decline seen since 2021, according to the government's Building Materials and Components Statistics.

Similarly, sand and gravel sales plummeted by 16% in Q2 2024 compared to the same period in 2023.

Ready-mixed concrete has also seen a steep decline, with sales dropping by 17.1% in Q1 2024 year-on-year.

2024 sees a decline in construction output

This decline in building material deliveries has coincided with a Bank of England report that shows a decline in construction output, with a less than positive outlook for the rest of the year.

Private housebuilding remains below last year's levels, and public sector projects are limited by budget constraints, although it was revealed that smaller housebuilders performed better in Q2 than Q1 in 2024.

Forecasts from experts like Experian and the Construction Products Association suggest that 2024 will be difficult, with declines expected before a potential recovery in 2025 and 2026.

The Office for National Statistics also reported a small decrease in construction output in the second quarter of 2024, mainly due to a drop in new work, despite some growth in repair and maintenance.

'Demand remaining subdued across most sectors'

John Newcomb, CEO of the Builders Merchants Federation, and Peter Caplehorn, CEO of the Construction Products Association, co-chairs of the Construction Leadership Council’s Material Supply Chain Group, noted that while product availability is currently good this is mainly due to subdued demand across most sectors.

In a joint statement they said: “Meeting in the wake of the King’s Speech, the group welcomed the new government’s planning reforms, but wants to see further details and specific plans to boost housing and construction and stimulate key sectors of the industry.

"Currently there are good levels of product availability across the board, but this is a direct result of demand remaining subdued across most sectors.

"It is difficult to see the market improving before the turn of the year, and suppliers have adjusted capacity to meet current demand."

They also revealed there were "concerns" about a "shortage of labour, particularly in areas requiring new skills, such as the installation of heat pumps," which is predicted to be "further exacerbated when construction activity increases".