It’s been a rocky start to 2022 for the paving industry, as the war in Ukraine is affecting both porcelain supplies and consumer demand.
At the end of last year, we encouraged merchants to keep stock on the ground. This strategy was a saving grace in helping merchants navigate temporary shortfalls in porcelain supplies in Q1 caused by the war.
In Italy, the huge spike in energy costs early on in the invasion led to factories closing for four weeks, as it wasn’t viable for them to open. The break gave our porcelain supplier the time to source alternative materials as most European porcelain incorporates Ukrainian clay, which is about five times cheaper than Italian clay. As a result, prices are going up.
We source our porcelain from different countries to mitigate local problems like those seen in Italy, but other suppliers also had problems meeting orders. One factory on the Poland/Ukraine border lost Ukrainian workers who returned to their country to fight, while in Spain, a hauliers’ strike put the brakes on getting product out of the country for five weeks at least.
The war is knocking consumer confidence, particularly on their intentions to spend on larger purchases such as home improvement projects. Good landscapers are largely booked up for 2022 and only losing a few jobs due to rising living costs. So, we expect to see more paving products being laid by DIYers and ‘furlough landscapers’ who are new to the industry, to save on labour costs. We have a complete library of ‘how to’ videos to support these customers.
Overall, Q1 paving sales are still up on pre-pandemic levels, but what happens in Q2 and beyond will hinge on a number of factors – none of which are in our control. If the situation in Ukraine improves, consumer confidence and spending will get a boost, while some better weather will also encourage people to get outdoors and tackle their gardens.
Our advice to merchants is to be prepared for the upswing. Keep stock levels healthy as customers don’t like to wait for the products they want. If you haven’t got what they want, they’ll take their business elsewhere.