Quarter 4 accurately reflected a year which has been preciously short of good economic news for the UK in general and for the construction sector in particular. The effect of ongoing inflation, interest rate rises and cost of living increases came home to roost.  It is at times like this, when we realise just how connected our industry is to the price of finance, public confidence, and inflation.

We know the underlaying demand still exists for both new housing and RMI projects of all sizes but the registration statistics did not lie and demand weakened further by the end of the quarter when even the typical rush to complete housing by year end did not materialise.

New mortgage approvals increased to 50,500 in December 2023, up from a 49,300 in November but falling short of the market expectation of 52,500. Although mortgage approvals reached a six-month high, the inevitable lag means this is not yet visible as an increase in activity levels on the ground.

Many producers will be hoping that 2024 will stabilise with the prospect of some electioneering interventions to boost confidence and drive demand. GfK’s Consumer Confidence Index, consumer confidence increased three points to -19 in January 2024, recovering ground lost in the last two years. There is a market expectation that interest rates will weaken as the year progresses to give the housing market a much-needed lift. However, with inflation staying stubbornly high, falls in interest rates may be further off than hoped.

At Brett Martin we remain confident that the current market weakness will cycle through and so our focus is firmly fixed on developing increasingly customer focused service initiatives along with investments in manufacturing efficiency in preparation for the next growth phase of our business. Every part of the supply chain is facing the same challenges and so the process of partnering our merchants to maximise every opportunity remains paramount.