Wednesday 5 February 2025
Construction Product Manufacturing Recovery Underway but Cost Pressures Return
The results of the Construction Products Association’s State of Trade Survey for the fourth quarter of 2024 showed a third consecutive quarter of growth in construction product manufacturers’ sales. This was accompanied by broad expectations of continued growth over the next 12 months as the construction recovery accelerates.
In 2024 Q4, a balance of 25% of heavy side manufacturers reported that sales of construction products increased compared to Q3, marking the third straight quarter of growth. Alongside this, 31% of light side manufacturers reported a rise in product sales. The heavy side also recorded the first annual growth since 2022 Q3, although this was largely expected due to comparison with the nadir of the downturn in housebuilding and repair, maintenance, and improvement (RM&I) at the end of 2023.
Both heavy and light side manufacturers anticipate continued growth in 2025. However, they are currently facing rising wage and raw material costs, which are expected to continue in the near-term. All heavy side manufacturers reported an increase in wages & salaries and raw materials costs in Q4, whilst all heavy side manufacturers reported and 93% of those on the light side expected costs to increase over the next 12 months.
Rebecca Larkin, CPA Head of Construction Research said: “Our surveys have shown three quarters of sales growth across product manufacturers, which appears to confirm that demand from construction is progressing from stabilisation into the recovery phase. The pickup expected in the two largest sectors of construction – private housing new build and repair, maintenance and improvement (rm&i) – no doubt underpinned expectations of that recovery gaining pace throughout 2025.
“The inflationary backdrop suggests there will be some headwinds, however. Wages and raw materials were reported as the key drivers of input cost inflation in Q4 and although manufacturers anticipate increasing headcount to respond to the pickup in demand and sales this year, they will also have to contend with the higher costs of doing so when employer National Insurance Contributions are raised in April.”
Key survey findings include:
• A balance of 25% of heavy side firms and 31% of light side firms reported that construction products sales rose in 2024 Q4 compared with 2024 Q3
• All heavy side manufacturers and 43% of light side manufacturers anticipated a rise in sales over the next 12 months
• All heavy side manufacturers and 86% of light side manufacturers reported an increase in costs compared to a year earlier
• All heavy side manufacturers and 93% of light side manufacturers anticipated an increase in costs over the next 12 months
• The largest balances for cost increases were reported for wages & salaries and raw materials
• Three-quarters of heavy side manufacturers and one-third of light side manufacturers anticipated an increase in their labour force over the next 12 months
ENDS
NOTE TO EDITORS:
Underpinned by a comprehensive survey of our members, the CPA State of Trade Survey provides timely analysis of current trends in the construction products manufacturing sector and an assessment of likely trading conditions going forward. To find out more about of State of Trade Survey click here.
Heavy side products are typically structural materials used early in the construction process and include materials used in transport and other civil engineering projects. Heavy side materials include aggregates, cement, ready-mix concrete, structural and reinforcing steel. Light side products are typically installed later in the construction process and include internal fittings and services. Light side products include heating and ventilation systems, plumbing, electrical and lighting, doors and windows, kitchen furniture and thermal insulation.
The Construction Products Association is the leading organisation that represents and champions construction product manufacturers and suppliers. This vital UK industry defines our built environment, providing the products and materials needed for homes, offices, shops, roads, railways, schools and hospitals. Our industry directly provides jobs for 382,500 people across 23,949 companies and has an annual turnover of £62.5 billion.
The CPA produces a range of economic reports that provide its members, policy-makers and wider industry with a detailed understanding of the construction market to facilitate planning and business development. Members of the Association are entitled to receive these insights at no additional cost. Non-members can make one off purchases or subscribe for a full information package.
FOR FURTHER INFORMATION CONTACT:
Rebecca Larkin, CPA Head of Construction Research
Tel: 020 7323 3770
E-mail: rebecca.larkin@constructionproducts.org.uk
Rob Lee, Senior External Affairs Manager
Tel: 07841 447486
E-mail: rob.lee@constructionproducts.org.uk
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