Andrew Simpson, National Commercial Director Hanson Cement is BMBI’s Expert for Cement & Aggregates.
Seasonally adjusted demand for construction products finished strongly in Q4 2018. This had a positive effect on the overall performance for 2018, said the Mineral Products Association (MPA) in its latest report. The volume of crushed rock and asphalt sales grew 2.2% in Q4 2018 compared to the previous quarter, while sand & gravel and Ready Mixed Concrete (RMC) increased by 5.0% and 4.6% respectively. Mortar sales fell for the second consecutive quarter, by 1% compared with Q3. Yearly sales of aggregates and asphalt increased 2.1% and 0.7% compared with 2017. Total sales of RMC fell 1.6% in 2018, primarily because of lower construction activity in London. Mortar sales grew 14.3% due to increased housebuilding.
The Construction Products Association (CPA) downgraded its latest forecast to 0.3% growth in 2019 because of uncertainty surrounding Brexit. In contrast however, Hanson has had a positive start to 2019 and most merchants and suppliers we have spoken to have also seen volumes higher than expected. If the industry associations are right, construction is in for challenging times in 2019 with political uncertainty and continuing delays to major Government projects.
The BMBI debate in October 2018 covered some interesting topics that will impact the merchant sector. One that the industry can influence is “changes in buyer behaviour and how we sell”. We’ve seen the impact the internet has had on high street retailers and how consumers have changed their shopping habits. We’ve not yet seen the same dramatic change in buyer behaviour in our sector, and there’s been much debate as to why. We don’t know why, but there will be many reasons, and we must be careful not to generalise as our sector is very diverse. We will be better served if merchants and suppliers collaborate closely to improve what we already do. Between us we have far more product and industry knowledge than potential online disrupters. We need to use technology to our advantage to improve our processes, data, training, logistics, customer interaction, and overall end user experience. The aim is to have frictionless transactions that meet the expectations of customers throughout the supply chain.