Material suppliers are expecting costs to rise over the next year, according to Construction Products Association (CPA) recent State of Trade survey for Q3. Data shows that cost pressures are expanding from raw materials to fuel, energy, wages and salaries.
This expansion is likely due to the rise in global gas, electricity and crude oil prices—along with a shortage of both skilled and unskilled workers. However, Amandeep Bahra, CPA economist, says in the survey that "despite challenging trading conditions stemming Covid-19 and Brexit, construction product manufacturers achieved a fifth consecutive quarterly rise in product sales in Q3. More encouragingly, manufacturers remained optimistic about sales growth over the next 12 months."
Forty-four percent of heavy side manufacturers who predominantly produce items like concrete, blocks and cement, reported an increase in sales compared to Q2. For light side manufacturers who predominantly produce items from previously prepared materials and accessory uses, 26% reported an increase in sales compared to Q2. This represents the fifth consecutive quarter of growth, according to the survey. Other key projections include:
- 54% of heavy side manufacturers and 64% of light side manufacturers anticipate a rise in sales over the next 12 months
- 100% of both heavy side and light side manufacturers seeing increased fuel costs in annual terms
- 93% of heavy side manufacturers and 89% of light side manufacturers report an annual rise in energy costs
- 93% of heavy side manufacturers and 95% of light manufacturers report higher costs of raw materials in annual terms