Ibstock comment: Q4 2017

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

Demand for bricks is at a high level and brickmakers in Great Britain (GB) are producing more.
BMBI Q4 data shows builders’ merchants’ sales performed strongly in the quarter, 6.3% higher than the same period last year. The largest product sector, Heavy Building Materials (+6.4%), which includes bricks, did slightly better than the total market.

Anecdotally, builders’ merchants report brisk sales in January 2018, although in the North and Scotland weather has adversely affected some building activity.

In the private housing sector, proportionally the largest user of facing bricks, housing starts continued to rise during 2017. It’s estimated that the annualised number of housing starts was around 200,000 – still a long way short of the numbers required to meet demand, and way short of government targets.
Latest NHBC figures (Q3 2017) also show a greater proportion of detached (33%) and semi-detached (28%) houses being built, and fewer flats and maisonettes (21%). This leads to more bricks being required to build the average unit. Indeed, these are the highest (detached and semi-detached) and lowest (flats and maisonettes) percentages in nearly 20 years.

Consequently, demand for bricks is at a high level. During 2017, GB brick manufacturers despatched 157 million more bricks than they collectively produced. That has clearly resulted in depletion of stocks at many factories, and therefore longer availabilities. These figures exclude additional volumes of imported bricks, which continue to rise to supplement demand.

GB brick manufacturers are increasing production levels at their factories wherever possible, and in November 2017 produced the highest monthly volume in over two years. There are still stocks of bricks readily available for customers at some factories and Ibstock’s brand new soft mud brick factory in Leicestershire is now producing bricks. It will be increasing output up to 100 million bricks a year by the end of 2018.

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

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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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