Material price inflation continued to fall in June, although plummeting brick and block deliveries suggest the industry is “not out of the woods”.
Brick and block deliveries plunged by 12.9 and 9.8 per cent respectively in June 2024 compared with June 2023, according to government analysis, although deliveries increased slightly month-on-month. Block deliveries grew by 1.6 per cent from May to June, and brick deliveries increased by a more modest 0.8 per cent.
In all, material price inflation decreased by 0.9 per cent in the year to June 2024, led by costs for non-residential new-build projects, which dropped by 2.3 per cent. However, costs rose by 0.7 per cent on both new housing jobs and repair and maintenance work over the past year.
The price of flexible pipes and fittings inflated the most in the year to June as costs rose by 17.4 per cent, while prices for fabricated structural steel declined by 16.2 per cent.
Chris Smith, head of specialist equipment at Aldermore Bank, welcomed the overall fall in material price inflation, although he added the brick and block shortages suggest the sector is “not out of the woods”.
He said: “The more favourable economic conditions will allow developers and contractors to take this as a sign of improving economic stability, boosting confidence to initiate and commit to new projects.”
The figures come as brickmaker Ibstock reported revenue had reduced by 20 per cent compared with last year, which it attributed to “lower market demand”. Revenue slipped by £45m in the six months ending 30 June 2024 compared with the first half of 2023, while pre-tax profit fell by 60 per cent in the same period.
The company has struggled with falling sales over the past year, opting to close one of its factories in Lancashire in response, although it continues to invest in a new West Midlands site, which it says will produce the UK’s first certified carbon-neutral brick.
The firm is also ramping up its modular capacity, having invested £50m in what it claims will be the UK’s first fully automated brick slip manufacturing centre in Nostell, West Yorkshire.
Chief executive Joe Hudson said that while market conditions remained “challenging” in the first half of the year, he expected demand to recover in the coming months.
He added: “The new government’s commitment to increasing the supply of new homes creates a more positive backdrop for medium term demand, and the group remains well-positioned for market recovery.”
