We break down the key figures for building materials prices and why the homebuilding market is seeing an increase in activity
Building materials prices could be more competitive in 2025 with an increase in activity likely, report finds(Image credit: Getty Images)
The UK construction and building manufacturing sector is heading into 2025 with renewed vigour, buoyed by a significant rise in sales revenues and purchase orders, according to a new report.
The report by inventory management software provider Unleashed found there was a 126% increase in sales for small and mid-sized construction firms during the third quarter of 2024, alongside a 97% uptick in purchase orders.
The report highlights a growing demand for construction materials, driven by government investment in housing and infrastructure and a rebound in private housing repair and maintenance.
With construction output rising by 0.8% in Q3 2024 and demand for materials higher than ever you may be wondering if this will impact how much it costs to build a house and we have the answer here.
Rising demand for building materials
Building material prices are available at "below-average price points" in some areas, according to market leaders(Image credit: Getty Images)
The surge in demand aligns with government plans to "rebuild Britain" through a £13 billion investment, which includes the construction of 1.5 million new homes and infrastructure development projects, the latest Manufacturers’ Health Index reveals.
The Net Zero Innovation Portfolio, a £1 billion fund aimed at advancing green technology, has also fueled optimism in the sector.
Ted Bromley-Hall, Managing Director of UK landscaping products manufacturer IBRAN, emphasised the importance of local sourcing in maintaining competitive pricing while ensuring quality.
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“Customers are increasingly price-focused but unwilling to compromise on quality. By sourcing raw materials locally, we offer sustainable, premium products at below-average price points. This approach has driven a 200% increase in demand compared to last year,” he noted.
Balancing inventory with confidence
The report also indicates that construction and building manufacturers are increasing inventory purchases, a sign of confidence in future orders.
While this strategy recalls the "just in case" purchasing of the post-COVID era, Joe Llewellyn, GM of Cloud ERP at The Access Group, suggests it reflects genuine optimism. “Lead times remain low, and the supply chain is showing signs of robust business confidence,” he said.
Llewellyn also highlighted the dual impact of the Autumn Budget on manufacturers. While rising costs in National Insurance, wages, and business rates present challenges, government investments in housing, infrastructure, and clean energy could offset these pressures by boosting demand for building materials and technology.
Inflation and pricing stability
UK inflation, which unexpectedly dipped to 2.5% in December 2024, has further contributed to optimism in the industry.
A potential interest rate cut in the near term may help stabilise costs, creating favourable conditions for manufacturers and builders as they tackle ambitious housing and infrastructure projects.
As 2025 unfolds, the construction sector's resilience and adaptability will be tested, but the rise in building material purchases and the alignment of public investment with private sector demand offer a promising outlook for the industry.
Cement production slumps, bricks boom amid mixed trends for key materials
Cement and clinker production in the UK have faced significant declines, with cement output dropping by 8.4% in 2023 to 7.7 million tonnes and clinker falling by 11.2% to 6.4 million tonnes, according to the government's Building Materials and Components Statistics.
Meanwhile, the sand and gravel market shows a fluctuating pattern. While sales rose by 1.9% in Q3 2024 compared to Q2, year-on-year figures reveal a 5.2% drop, part of a broader decline since 2022.
Ready-mixed concrete sales mirror this trend, falling 22.8% in Q2 2024 year-on-year, continuing a steady decline since 2021.
In contrast, the brick market has shown resilience, with September 2024 deliveries increasing by 14.7% compared to the previous year, reflecting growth momentum that has persisted since 2013, despite interruptions like the pandemic.
Concrete blocks, however, remain in decline, with September 2024 deliveries down 4% year-on-year, echoing trends seen since 2021.
Cement and clinker
Decreased by 8.4% in 2023 (7.7 million tonnes) compared to 2022 (8.4 million tonnes).
Decreased by 6.8% in 2022 compared to 2021.
Clinker production:
Decreased by 11.2% in 2023 (6.4 million tonnes) compared to 2022 (7.2 million tonnes).
Decreased by 2.8% in 2022 compared to 2021.
Sand and gravel
Seasonally adjusted sales:
Increased by 1.5% in Quarter 3 2024 compared to Quarter 2 2024.
Decreased by 5.7% in Quarter 3 2024 compared to Quarter 3 2023.
Dropped by 6.2% in Quarter 2 2024 compared to Quarter 1 2024.
Remain below pre-2008 recession levels and have generally declined since 2022.
Ready-mixed concrete
Seasonally adjusted sales:
Dropped by 8.6% in Quarter 2 2024 compared to Quarter 1 2024.
Declined by 22.8% in Quarter 2 2024 compared to Quarter 2 2023.
Have been in decline since 2021 after a steady recovery post-2008 to 2009 recession.
Bricks
Deliveries of bricks in September 2024 took an unexpected twist with deliveries increasing by 14.7% compared to the previous year(Image credit: Getty Images)
Deliveries:
Increased by 28.4% in November 2024 compared to November 2023.
Rose by 19.4% in October 2024 compared to October 2023.
Gained 0.8% in November 2024 compared to October 2024 and 1.5% in October compared to September.
Showed consistent growth from 2013 until 2022, except for a sharp decline in 2020 during the pandemic.
Concrete Blocks
Deliveries:
Increased by 13.7% in November 2024 compared to November 2023.
Rose by 4.2% in October 2024 compared to October 2023.
Month-on-month increases included 2.7% in November compared to October and 1.7% in October compared to September.
Experienced growth from 2013 to 2020, with declines since 2021.
Construction materials experiencing the greatest price increases and decreases in the 12 months to December 2024, according to the government's latest Building Materials and Components Statistics
Greatest price increases
Precast concrete: Blocks, bricks, tiles and flagstones +6.3%
News Editor Joseph has previously written for Today’s Media and Chambers & Partners, focusing on news for conveyancers and industry professionals. Joseph has just started his own self build project, building his own home on his family’s farm with planning permission for a timber frame, three-bedroom house in a one-acre field. The foundation work has already begun and he hopes to have the home built in the next year. Prior to this he renovated his family's home as well as doing several DIY projects, including installing a shower, building sheds, and livestock fences and shelters for the farm’s animals. Outside of homebuilding, Joseph loves rugby and has written for Rugby World, the world’s largest rugby magazine.
