Q3 saw a shift in the trends for 2021, as typical seasonal trading patterns began to return.

According to the Mineral Products Association (MPA), construction demand for mineral products slowed in Q3, with ready-mixed concrete down 6.7% compared to Q2 while asphalt (-4.3%) and mortar sales (-3.7%) were also down. But while retail demand for DIY has eased, trade business continues to drive merchant sales for cement and aggregates, and construction is strong.

As part of an energy intensive industry, we’re one of many businesses lobbying for government help with skyrocketing energy prices. Energy costs doubled in Q3, and we expect them to stay high throughout Q4 and into 2022.

We’re also experiencing cost pressures caused by pallet, packaging and raw material shortages, and haulage difficulties, particularly for packed products. Increases in the cost of carbon is placing manufacturers under significant pressure, to the extent that manufacturers may need to pause production. The price of carbon is now much higher than we had forecast, with a peak of £75 a tonne.

In the next five years, construction can expect to see changes in cement types as the industry drives to cut carbon. To avoid escalating carbon credit costs and volatile energy prices, we are investing in measures to reduce energy usage and emissions. Currently Hanson is investing in two pilot schemes: a carbon capture and storage (CCS) scheme for our Padeswood cement plant, and we have trialled using a net zero fuel mix including hydrogen at a kiln in Ribblesdale. Together, in the future, these could reduce emissions by almost 1m tonnes of carbon a year.

But schemes like this are at the cutting edge of innovation and the infrastructure required for them to be adopted at scale doesn’t yet exist. To implement CCS at our three sites would require hundreds of millions of pounds investment. At Hanson, we’ve reduced our CO2 emissions by 50 per cent since 1990, and further investment is planned to reduce them even further.

With supply problems and price pressures coming at us from all angles, it looks like a bumpy ride in 2022. Most companies are at capacity and cannot make more, and without a magic wand, we’d just ask for calm and understanding in the short term as the industry struggles to meet demand.