Hanson Cement comment: Q4 2017

Andrew Simpson, National Commercial Director Hanson Cement is BMBI’s Expert for Cement & Aggregates.

The latest Mineral Products Association report shows sales for heavy-side construction products grew marginally in Q4 2017 compared to Q3 2017 and from a low base. Aggregates sales volumes were up by 2.3%, ready mixed concrete (RMC) 1.6% and asphalt 0.8%. Mortar sales continued to grow strongly, up 6% over the quarter. Looking at the full year, we saw sales volumes of RMC decline by 2.6% compared to 2016, whilst asphalt (0.1%) and aggregates (-0.4%) remained broadly flat. Mortar sales enjoyed another year of strong growth, up 11.1% in 2017.

This strong performance in mortar indicates continued activity in housebuilding, but weaker sales across the mainstream materials points clearly to an overall downturn in construction activity. A particular concern for ready mix concrete suppliers is five consecutive quarters of decline in the London RMC market. This is inevitably having an impact on cement and aggregate volumes and could hit merchant sales further down the line.

It looks like 2018 will be a challenging year for builders’ merchants who are reliant on the Repair Maintenance and Improvement sector, given the pressure on consumer finances created by rising inflation combined with low wage growth. Brexit negotiations will no doubt continue to cause uncertainty and inhibit investment in our sector.

Throughout 2017 the BMBI expert reports and panel debates have highlighted key issues that our industry faces such as Brexit, increased legislation, lack of investment, material availability, skills shortages and attracting young people to our industry. Hanson UK is addressing these issues by making significant investments in raw material reserves and increased capacity and focusing clearly on recruiting and training craft and higher apprentices and the graduates who will become the business leaders of the future.

The investment of over £80m in two new marine aggregate dredgers and a vertical mill at our Padeswood works to increase cement capacity demonstrates the confidence our parent company HeidelbergCement has in the UK business.

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Launched in 2015, the award winning monthly Builders Merchant Building Index (BMBI) report is the only reliable measure of repair, maintenance & improvement (RMI) activity in the UK. Filling an important gap, it can be widely used in construction, and by economists, Government, national media, commentators and influencers outside the industry.

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