Ibstock comment: Q3 2017

The primary sectors of demand for facing bricks are private housing and RMI and both appear set to progress strongly. Builders’ merchants’ brick sales remain strong, the volume of bricks in merchants’ depots has returned to normal, and stockists are generally reporting healthy demand.

At the same time, developers continue to increase their build programmes in response to the demand for new housing. According to a recent NHBC report, new home registrations saw their highest third quarter total for a decade. During July to September, (Q3 2017) 37,936 new homes were registered, a 6% increase on the same period last year. Of these 29,083 were for the private sector, a 9% increase on Q3 2016.

Evidence indicates a greater proportion of detached, semi-detached houses and bungalows being built and fewer flats and apartments. This leads to more bricks being required to build the average unit. As a result, demand for bricks is at a particularly high level. In the first six months of 2017, the GB brick industry experienced its three single biggest despatch months in nearly ten years – since before the credit crunch.

In the 12 months to the end of September 2017, GB brick manufacturers have despatched 176m more bricks than they have collectively produced, resulting in depletion of stocks at many factories and, therefore longer ‘availabilities’. These figures exclude volumes of imported bricks, which are continuing to rise to supplement GB supply.

GB brick manufacturers are increasing production levels at their factories wherever possible, and there are still stocks of bricks available for customers at some factories. In addition, Ibstock’s new factory will be producing at the rate of up to 100 million bricks a year by the end of 2018.

The imbalance in supply and demand is expected to continue throughout next year and it is important that builders’ merchants work closely with their customers to plan their direct-to-site brick needs as early as possible. I’d also advise merchants to consider their ongoing depot stock requirements and place accurate schedules for key products for 2018.

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