Building materials prices decrease further across the board

Construction materials prices for all work fell by 0.9% in the 12 months to June 2024, according to the latest figures published by the Department for Business and Trade.

This was a smaller decrease than the 2% drop seen in the year to May 2024.

New housing registered a 0.7% increase, repair and maintenance was up by 0.7% and other new work decreased by 2.3%.

Each month the Department for Business and Trade publishes construction material price indices, covering all work, new housing, other new work and repair and maintenance, as well as tracking a selection of building materials and components for the UK, and providing statistics on bricks and concrete blocks production, delivery and stock for Great Britain.

The figures demonstrate a continued cooling in materials cost inflation, compared to where prices have been in the last couple of years, albeit with differences in annual movement between some outlier materials, and therefore for different trades.

Flexible pipes and fittings, and metal doors and windows saw more than 10% annual growth in the year to June 2024 (17.4% and 16.1% respectively).

Fabricated structural steel, gravel, sand, clays and kaolin, including the Aggregate Levy, and steel concrete rebar continue to show the biggest annual drops (-16.2%, -12.8%, -10.7% respectively) of the materials featured in the dataset.

On a monthly basis, the most significant price differences were seen in imported plywood (-2.1%), steel concrete rebar (-1.7%) and imported sawn or planed wood (-1.3%).

DBT’s report also showed concrete block deliveries (seasonally adjusted) were down by 9.7% in the year to June 2024, but up 1.6% on a monthly basis.

Brick deliveries (seasonally adjusted) fell by 12.9% in the 12 months to June 2024, but increased by 0.8% compared with May 2024. Stocks of all types of bricks at the end of June stood at 529.4 million, which was 11.1% higher than at the end of June last year (476.3 million). By comparison with pre-pandemic activity levels, brick deliveries in June 2024 were 38.4% lower than in June 2019, and stocks were 42.0% higher.

BCIS Chief Data Officer, Karl Horton said: “There are signs of recovery in the housing sector with housebuilders reporting improved sale rates so far in 2024. We expect to see annual output growth in the sector from 2025.

“The Bank of England’s latest Agents’ Summary of Business Conditions, covering the six weeks to mid-May, reported smaller housebuilders have seen an improvement in 2Q2024 on 1Q2024, while larger private developers are focusing on social housing projects to maintain output until private demand picks up.

“This mixed picture is reflected as well by respondents to the S&P Global UK Construction Purchasing Managers’ Index  survey. The index has flipped above and below 50 for housing activity over the last few months; with anything above 50 showing growth.

“It will take time for any effects of government strategy around planning and reduced interest rates to filter through.”