Brick Shortage in the UK!

Brick shortage threatens construction sector’s recovery hopes

Industry survey highlights scarcity of materials as leading impediment to growth as ONS estimates sector’s output fell 4% in November.

According to Rics, bricklayers have been especially scarce after housebuilding picked up on the back of the government’s Help to Buy scheme. 

A shortage of bricks and bricklayers has been highlighted as a threat to the construction sector’s recovery after new figures revealed a surprise drop in output.

Fears that builders cannot meet the rising demand for houses were fanned by an industry survey highlighting a scarcity of materials as a leading impediment to growth. The Royal Institution of Chartered Surveyors said almost 40% of the surveyors it polled cited shortages as a brake on activity. Echoing reports from housebuilders, they said bricks and concrete blocks in particular were in short supply. Skills shortages were also seen as hampering growth and bricklayers have been especially scarce after housebuilding picked up on the back of the government’s Help to Buy scheme.

The warning came as the Office for National Statistics (ONS) estimated that construction output fell 4% in November, the biggest drop in more than a year. The decline, alongside news that the manufacturing sector stalled in November, dampened hopes that the overall economy had picked up steam in the final quarter of 2013.

Alan Clarke, economist at Scotiabank, described the construction numbers as “very disappointing”. He said: “This is bad news for fourth quarter GDP. The flat reading on industrial production, with downward revisions to the previous month, compounded the misery.”

The ONS said manufacturing output was unchanged in November from the previous month, defying predictions that it would pick up by 0.4%. The wider industrial sector, which also includes mining and utilities, was also flat on the month.

Together the construction and industrial sectors make up just over a fifth of the economy and the downbeat news for November prompted several analysts to reassess a view that overall growth in the fourth quarter would match or beat the pace of 0.8% seen in the third.

The National Institute of Economic and Social Research (NIESR) now estimates the economy grew 0.7% in the fourth quarter. Still, after a pick-up in growth over the whole year, the thinktank says GDP over 2013 was probably up by 1.9%, growing much faster than the 0.3% recorded in 2012. “The level of GDP is now just 1.2% below its pre-recession peak [January 2008]. The economy is expected to expand at a reasonable pace in 2014,” NIESR added.

The official data contrasts with a number of upbeat business surveys for both construction and manufacturing. Housebuilders had a particularly strong finish to the year, according to the latest construction PMI survey. But builders have reported that the closure of brickworks in the recession has led to a shortage of materials and long waits for bricks needed to finish work created by the renewed surge in demand for houses.

Housebuilder Redrow said last year that many suppliers had been “caught on the hop” by the sudden upturn in demand for bricks, blocks and roof tiles.

The Construction Products Association said manufacturers have raised production and used imports as a temporary buffer as housing starts pick up pace.

A spokesperson said: “Brick production in November was 27% higher than a year earlier according to the latest statistics from the Department for Business … and all the major brick producers have stated that they will be operating over the winter period for the first time in five years. Furthermore, imports of bricks in Q3 were 39% higher than a year earlier.”