Ibstock comment: Q1 2018

Tony France, Sales Director Ibstock, is BMBI’s Expert for Bricks.

Following very high demand for bricks throughout 2017, despatches in the first quarter of 2018 have been lower than expected. Despatches from GB brick manufacturers were 6% down against Q1 2017. One reason for the performance difference is that Q1 2017 saw the highest brick industry despatch volume since the credit crunch in 2008. The relative timing of Easter also made a difference. However, high despatch volumes in Q1 2018 suggest that the market remains robust.

Predominantly, the reduced levels of despatch are due to the disruption for major housebuilders as a result of the bad weather. In one case, a major national developer is said to have as lost as many as 30 days in quarter one because bricks couldn’t be laid in cold temperatures. The bad weather has affected sales of bricks at merchants in some parts of the country; others report a brisk start to the year.

Many housebuilders have reported that they intend to make up the shortfall through the remainder of the year. However, there is concern from within this sector that the housebuilders’ ability to achieve the government’s own house-building targets is being affected by a lengthy and onerous planning system and increasing labour shortages. The sector is also desperately awaiting a commitment from government to extend Help-to-Buy beyond 2021. This would give them the confidence to continue with land purchases in order to provide future sites.

For these reasons, and contrary to popular belief, brick stock levels in GB manufacturers’ yards have increased over the first quarter of 2018 and have grown each month since November 2017. GB brick manufacturers are continuing to increase production levels. Ibstock’s output, for example, will increase by up to 100 million bricks a year by the end of 2018 as their new Eclipse factory is fully commissioned.

With initiatives to support growth in private housing and RMI in place’s as well as improving brick stock levels, it’s expected that brick despatches will grow throughout 2018. My advice to merchants is to retain the disciplines of ordering and scheduling to ensure continuity of supply for key depot stock products.

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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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