Extended pre-construction services agreements (PCSAs), regulatory delays, investor uncertainty and declining consumer confidence have all been highlighted as factors behind a downbeat assessment.
The Construction Leadership Council’s materials supply chain group has issued its first update of the year, warning that continued weakness in the housing market is likely to remain a significant brake on any wider recovery in construction.
Authored by John Newcomb, chief executive of the Builders Merchants Federation, and Peter Caplehorn, chief executive of the Construction Products Association, co-chairs of the CLC’s materials group, the update acknowledged that the bulletin “is notable for its bleak assessment of market prospects”.
The authors added: “While large infrastructure schemes, including the prison programme, are progressing, this alone cannot offset the weakness in housing, where the government’s flagship commitment to deliver 1.5 million new homes remains far off track, hindered by planning capacity issues, regulatory delays and weak investor confidence.”
The update noted that there were “no notable product availability issues, and, unsurprisingly, in the current market, supply often exceeds demand”.
It highlighted brick manufacturing as an example, stating: “For example, brick manufacturers who invested in capacity when the government announced its housing ambition now hold large stock levels. While they are well-placed for an eventual recovery, given the subdued demand, they are reassessing how much production to maintain.”
Source: CLC’s materials group admits market looks ‘bleak’ at moment | News | Building
