Sales volumes were lower in Q2 compared to the same period last year. However, this was in line with expectations, and we performed well across our principal sectors. Conditions were challenging in the residential sector, but other sectors were relatively stable. We remain cautious, given the continuing impact of rising interest rates and overall uncertainty in the economy.
While we continue to see growth opportunities, market conditions are difficult. Construction company insolvencies are on the rise again. An on-going preference for fixed-price contracts is impacting many of our customers, and the industry must look to address these. In periods of weaker demand and project start delays, the supply chain needs to show more willingness to be flexible, and greater visibility of work pipelines.
The UK’s economic future is still uncertain, but it is predicted that we will likely escape a recession thanks to improving energy prices, a more resilient global environment, and continuing tightness in the labour market. Nevertheless, growth is expected to be weak by historical standards. It’s clear we need to do more to innovate and drive-up value in our sectors. In its recent Economic Forecast, the CBI stressed the importance of businesses investing and focussing on decarbonisation. British Gypsum’s investment in this area is well established, and we know what we need to focus on to evolve our approach.
One of our key objectives is to increase the number of Environmental Product Declarations (EPDs) that we publish for our products. They enable customers to make informed decisions on product selection and guide us in reducing the embodied carbon of our products and help further advance innovation.
We’re heavily focused on reducing the carbon footprint of our distribution network. In 2022, we introduced vehicles fuelled by hydrotreated vegetable oil (HVO) and liquefied natural gas (LNG) into our UK fleet. We’re also trialling deliveries to customers in fully electric vehicles. People are looking to us to drive change, and we’ll continue to pioneer new and improved ways of working to reduce our environmental impact.
Continuing to innovate in the delivery of new and improved buildings is vital. While construction market growth forecasts are subdued, we’re positive about the future outlook and are well positioned to support the needs of the construction sector with high-quality products, systems and services.