Ibstock comment: Q4 2016

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

Brick industry demand has increased strongly in recent years, but slowed in the early part of 2016 as distributors rebalanced stocks. Manufacturers have expanded their output to meet the increased demand allowing distributors to hold lower stocks.

It is a positive sign that the bricks now being ordered are being used. There doesn’t appear to be the stockpiling that the industry experienced in 2013-4. This is due to increased capacity, but also to the brick manufacturers’ and major developers’ improved planning systems. Combined with improved forecasting by developers this helps ensure customers get what they want when they need it, so there’s no requirement to panic-buy!

Last year, brick sales to the Repair Maintenance and Improvement (RMI) market were down as merchants stabilised yard stocks following over-stocking in 2015. However, RMI volumes are now returning and should get back to more normal levels this year. Generally, RMI brick demand, which makes up around one third of the brick market, is stable and not hugely affected by the severe fluctuations we’ve seen historically in the new-build housing sector.

Although brick manufacturers are experiencing strong demand, it’s important that housebuilders and merchants are re-assured that there is the capacity to meet demand. Manufacturers work closely with customers to help them schedule the bricks they need to maintain their business. In return, it’s vital that customers assist by scheduling accurate levels of volume, rather than over-ordering unnecessarily which can lead to false order-books and extended availabilities. In the specification market, we encourage architects to submit a Letter of Intent so the products they want can be reserved for their projects.

The Government’s Housing white paper, ‘Fixing our broken housing market’, should mean more good news for house building and, of course, more house building means more bricks are required. Housebuilders and merchants are advising that more homes will be constructed in 2017 compared to 2016. The trend is also shifting to building fewer apartments/flats and more detached/semi-detached and terraced houses. With this comes more RMI opportunities, which in turn feeds the future growth of the brick industry.

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