Block market recovery expected to be short-lived

BDS Marketing Research Ltd publish latest annual report on the UK building block sector

DESPITE a 2% increase in concrete building block deliveries in 2010, recovery in the sector is expected to be short-lived, says a new report from industry marketing specialists BDS Marketing Research Ltd.

The market for building blocks in Great Britain fell by nearly 50% during the period 2007–2009, resulting in the closure or mothballing of 14 plants as the industry set about matching capacity to demand.

After six consecutive years of falling sales, producers of aircrete blocks saw some respite last year with volumes ahead by around 15%, helped by better trading conditions in the housing market. However, sales of dense and lightweight blocks continued to fall.

BDS estimate that Tarmac continue as the largest block company in the industry, followed by Hanson and Aggregate Industries, with these top three companies estimated to have around 45% of production.

The BDS report estimates the output of each of the 100 plants currently operated by around 50 companies in the industry. It also identifies any plants that have opened or closed and gives an independent three-year forecast.

According to the report, plant closures have not been uniform across the whole country, with anecdotal evidence suggesting that there are some shortages, particularly in the South East.

BDS say they do not see the picture improving through 2011 or 2012 with further drops in demand forecast. However, growth is expected to return to the sector in 2013, bolstered by an increase in private construction while the cutbacks in the public sector will have started to work through the system. Nevertheless, demand for building blocks is still expected to be 40% lower than in 2007.

For further details of the annual report entitled: ‘Estimated market shares of concrete block companies in Great Britain’, contact BDS Marketing.