Q2 construction demand for mineral products was down on Q1, and Q2 2021. Q2 sales volumes of asphalt were down -6% compared to Q1, with ready-mix concrete down -7.4%, aggregates down –9.8% and mortar down -3.4%.

As expected, now Covid travel restrictions have been lifted there has been a shift in consumer behaviour with people keen to get away on holiday, rather than commit to RMI projects. How much of the RMI drop is due to people delaying or rethinking projects due to cost inflation remains to be seen. Underlying data suggests that normal, seasonal sales variances are as they were pre-Covid.

Tradespeople are still booked up, so the availability of staff and skilled labour could put a spanner in the works. The workforce is more mobile as employers compete to retain staff, offering higher wages to attract and keep them. There are more vacancies than people looking for work. This could be down to people taking early retirement during Covid, changing jobs or lifestyle during the pandemic, and the shortage of labour from the EU. Pressure in the supply chain is not about the supply of product now. There is still a shortage of HGV drivers, but as volumes are lower, it’s not so problematic.

We expect to see a sales bounce back in Q3 and Q4 as people return from holiday and continue to do home improvement projects. We predict that the repair, maintenance and improvement (RMI) market will stabilise and, if interest rates continue going up, those with savings may choose to spend on home improvements.

Cost is a big issue for the industry. Russia’s response to the sanctions from the West has had an off-the-scale impact for high energy users. Coal, gas and oil prices are going up and what was £200 p/MWhr is forecast to be over £500 come December.

Regulations continue to be an issue. The UK Reach regulations, being brought in post-Brexit are time-consuming, costly and frustrating to agree on.

We continue to support our customers in their efforts to decarbonise, focus on promoting and developing our sustainable products, and have a clear plan to meet our 2030 sustainability targets. You can find out more about what we’re doing to be more sustainable on our website: click here.