Hanson Cement Comment: Q4 2020

Andrew Simpson, Packed Products Director Hanson Cement is BMBI’s Expert for Cement & Aggregates.

Despite a roller-coaster of a first half, 2020 ended strongly for many manufacturers and stockists. In construction, the RMI (Repair, Maintenance & Improvement) and housing markets benefited most.

A second lockdown triggered huge growth in home improvements including repurposing rooms, garage conversions, house extensions, and well-appointed sheds as homeowners and families adapted quickly to a new way of life. The Government’s stamp duty scheme also boosted the market. According to Nationwide, house prices climbed 7.5% in 2020, the highest growth rate for six years.

According to the Mineral Products Association, sales volumes of asphalt and aggregates dropped 8.6% and 10.5% respectively in 2020 compared to 2019. Demand for ready-mixed concrete (RMC) and mortar was most impacted, with sales volumes down 18.5% and 23.5% respectively over the same period, mainly due to construction site closures during the first lockdown. However, demand improved during the second half of 2020, with volumes picking up faster than expected in Q3 and continuing to grow. Q4 quarter-on-quarter volumes increased 9.1% for RMC, 7.8% for aggregates, 5.5% for asphalt and 3.1% for mortar.

We forecast continued growth in 2021. The Government’s strong support for construction, and its focus on national infrastructure projects, including nuclear, rail and road, will drive demand for core aggregates and cement. Barbour ABI identifies 700  major projects worth £300 billion over the next five years.

While the UK is leading with its vaccination programme, the pandemic and the challenge of managing Covid infections will be with us for some time. The industry has been quick to implement robust measures for safe working so production facilities remain open, but it’s important for business, our mental health and wellbeing that we get back soon to interacting normally with people. Teams, Zoom and other video software have changed how we communicate, and they have shown us how we can be much more productive, but not everything works well virtually. Networking events and meeting people remains an important part of our industry and are essential for establishing and building customer relationships. We look forward to resuming safely the human, personal and social side of lives from summer onwards!

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