Cost Pressures Intensified for Construction Products Manufacturers in Q3

The construction products manufacturing sector expanded for a fifth consecutive quarter in 2021 Q3, according to the latest Construction Products Association’s State of Trade Survey. This is despite escalating cost pressures and ongoing issues on the supply side that have been further exacerbated by a shortage of HGV drivers and disruption at major ports.

In Q3, a balance of 44% of heavy side manufacturers reported that sales had increased compared to Q2, whilst on the light side, 26% reported an increase. Both balances fell from those recorded in the previous quarter, however. Given a strong pipeline of new work in private housing, private housing repair, maintenance and improvement (rm&i) and infrastructure, 56% of heavy side and nearly two-thirds of light side manufacturers anticipate further sales growth over the next 12 months.

The third quarter data, however, showed that cost pressures intensified and broadened from raw materials to fuel, energy and wages & salaries, owing to the recent rise in global gas, electricity and crude oil prices, as well as a shortage of both skilled and unskilled labour. Given the strength of demand for construction products and materials, capacity utilisation also increased in the year to Q3, particularly on the heavy side.

Amandeep Bahra, CPA Economist said: “Despite challenging trading conditions stemming Covid-19 and Brexit, construction product manufacturers achieved a fifth consecutive quarterly rise in product sales in Q3. More encouragingly, manufacturers remained optimistic about sales growth over the next 12 months. However, the recent surge in global energy and commodity prices have pushed up energy and fuel costs for manufacturers. All firms surveyed reported an annual increase in fuel costs, whilst the balance citing higher energy costs hit a four-year high for energy-intensive heavy side manufacturers and a nine-year high for light side manufacturers. This comes as raw materials and wages & salaries continue to put upward pressure on input costs and with a record high proportion of heavy side firms operating at over 90% capacity, cost pressures are unlikely to abate any time soon, especially, as the full impact of rising energy prices is yet to be felt.”

Key survey findings include:

  • A balance of 44% of heavy side firms and 26% of light side firms reported that construction products sales rose in Q3 compared with the previous quarter, the fifth consecutive quarter of growth.
  • On balance, 56% of heavy side firms and 64% on the light side anticipated a rise in sales over the next 12 months.
  • Fuel costs increased in annual terms, according to 100% of manufacturers surveyed on both the heavy side and light side, the highest balances since 2011.
  • 93% of heavy side manufacturers reported an annual rise in energy costs, the highest balance in four years.
  • 89% of light side manufacturers reported an annual increase in energy costs, the highest balance in nine years.
  • Raw material costs rose in annual terms according to a balance of 93% of heavy side manufacturers and 95% of light side manufacturers.




Heavy side products are typically structural materials used early in the construction process and include materials used in transport and other civil engineering projects. Heavy side materials include: aggregates, cement, ready-mix concrete, structural and reinforcing steel. Light side products are typically installed later in the construction process and include internal fittings and services. Light side products include: heating and ventilation systems, plumbing, electrical and lighting, doors and windows, kitchen furniture and thermal insulation.

The Construction Products Association is the leading organisation that represents and champions construction product manufacturers and suppliers. This vital UK industry defines our built environment, providing the products and materials needed for homes, offices, shops, road, railways, schools and hospitals. Our industry directly provides jobs for 382,500 people across 23,949 companies and has an annual turnover of £62.5 billion.

The CPA produces a range of economic reports that provide its members, policy-makers and wider industry with a detailed understanding of the construction market to facilitate planning and business development. Members of the Association are entitled to receive these insights at no additional cost. Non-members can make one off purchases or subscribe for a full information package.


For further information contact:

Amandeep Bahra, CPA Economist
Tel:      020 7323 3770


Matt McKeown, CPA Senior Communications Executive
Tel: 020 7323 3770

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