Andrew Simpson, National Commercial Director Hanson Cement is BMBI’s Expert for Cement & Aggregates.
Demand for cement and aggregates strengthened in the first quarter of 2017, mainly driven by increased activity in infrastructure projects.
The CPA reports that overall construction activity is masking a varied performance in individual construction sectors. This explains the mixed feelings we’re getting from the merchant and retail sectors when discussing their first quarter performance. However, most builders’ merchants are reporting first quarter growth compared to the same period last year and, on the whole, confidence is high moving into the second quarter. One note of caution: inflation is now higher than wage growth, which may weaken consumer confidence in the RMI sector which could affect demand and soften merchant sales.
Increased material and energy costs post the referendum continue to create difficulties throughout the supply chain although the uncertainty around Brexit has been superseded by news of a general election on 8th June 2017. As yet, we’ve not seen any negative effect on volumes across our product lines. But the construction industry needs political stability, and it’s vital that we keep up the pressure on the new Government to maintain its commitment to invest in projects that will benefit our sector.
One of the biggest underlying problems we all have to deal with is the shortage of skills throughout construction and the supply chain. As the average age of our workforces increases we need to raise the profile of the construction industry to attract new talent. It’s in all our interests to ensure we have fully trained and competent workforces.
At Hanson Cement, we’re working actively with industry bodies to engage jointly with schools and universities to try to attract school leavers and graduates to our sector. We use our higher apprentices, graduates and unit managers as ambassadors at events to engage with prospective apprentices and craftsmen. Many of them are surprised that we have over 750 different job roles across our business, with excellent training and career prospects.
In summary, the outlook is positive despite political unrest. It will be interesting to watch how things unfold over the summer.