The start to 2024 has been challenging, as could be expected. Slowly but surely inflation has started coming down, while the UK moved out of a recession again, with the Bank of England recently claiming a corner has been turned. The economy is increasingly becoming a key battleground ahead of a yet unannounced general election to take place before the end of January 2025. The construction sector plays an important part in the economy, but with a lack of focused government input for the sector before the elections, indications are clear that another difficult year is ahead.
Overall value for the first quarter is down by -7.2%, with volume down by -8.7%. The headline figure is the noticeable decline in price growth, which now sits at only +1.6%, compared to +7.1% for 2023 Q4 vs 2022 Q4 and +16.0% for 2023 Q1 vs 2022 Q1. The two largest categories drive this with, firstly, Timber & Joinery sitting at -14.8% against 2023 Q1. Value for Timber & Joinery was down by -10.6%, with volumes up by +4.9%.
The other main category, Heavy Building Materials, has seen a gradual quarterly price growth decline against the same period from the previous year, starting at +25.8% for 2023 Q1 vs 2022 Q1 and now sitting at only +3.5% for 2024 Q1 vs 2023 Q1. This is a noticeable drop from the Q4 comparison, which sat at +12.4%. Heavy Building Materials value was down by -9.4%, while volume was down by -12.5%. As mentioned in my previous quarterly overview, the higher price growth compared to the UK inflationary figure was primarily driven by Bricks and Blocks, but this growth has now completely tailed off.
Most of the other smaller categories have seen minimal declines in value growth compared against 2023 Q1. Landscaping is down by -2.2%, with volume down -9.4% and price growth up by +7.9%. Kitchens & Bathrooms and Plumbing, Heating & Electrical are down by -1.4% and -3.2% respectively in value. Workwear & Safetywear and Decorating were the only categories to see growth in Q1, up by +11.5% and +2.1% respectively.
The outlook for Q2 remains bleak, and as usual will be dependent on good weather, especially as March was a wetter than average month across most of the UK. There is an expectation in the sector that growth will only return in the latter half of 2025, so for now it’s very much a case of battening down the hatches.
