The construction product manufacturing sector ended 2024 on a stronger footing than it started, according to the Construction Products Association (CPA) Q4 2024 State of Trade Survey.
Sales growth was reported by 25% of heavyside firms and 31% of lightside firms during Q4 – growth that was largely expected, due in large part to the base effects of comparing with 2023 Q4 – the nadir of the downturn in house building and repair, maintenance and improvement (RM&I). However, all heavyside manufacturers reported an increase in costs during the final quarter of 2024, with rising salary and raw material costs causing price inflation.
Nevertheless, three quarters of sales growth across product manufacturers provides early evidence that demand is moving from stabilisation into the recovery phase. Optimism for the year ahead was clear, with all heavyside manufacturers anticipating an increase in sales over the next 12 months, alongside a balance of 43% of those on the lightside. Lower balances on the lightside are typical when activity is picking up on new project starts, which tend to use structural, heavyside products first with lightside products introduced later in the build schedule.
To meet higher demand this year, both heavy and lightside manufacturers expect to increase headcount, despite higher payroll costs that will come into effect in April: the increase in the National Living Wage (and, consequently, for subsequent pay bands to maintain a ‘premium’) and the rise in employers’ National Insurance Contributions. Wages and salaries were already cited as a key driver of input cost inflation for manufacturers in Q4, with raw materials costs also picking up.
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