NACF Market Intelligence Reports

Overview

Housebuilding continues to lead drop in demand or construction services and shift to Low Carbon continues to drive demand profile.

ONS data reports a drop in overall output of 1.0% in the three months to February 2024, driven by a decrease in new work, which was only partially countered by increases in repair and maintenance work of 1.6%. Materials prices overall are down 1.9% year on year.

With the market slowdown driving price decreases, furthers shifts towards refurb is easing pressure on the supply concrete frames, this could also be exacerbated by a shift to lower carbon alternatives, although concrete production continues to account for 8% carbon emissions globally.

FMB members report a 44% drop in enquiries, but skills shortages remain a challenge amongst FMB members surveyed in a poll. Over a third of members report that jobs are delayed because they are struggling to hire skilled workers.

The rate of housebuilding is still largely driven by affordability of private purchases, with the current relatively high Bank of England base rate variously predicted to decrease to between 3-4% by the end of 2025, this could be a key indicator of material and labour availability over the coming period.

In the non-residential sector, SCF suppliers are reporting increases in lead times for curtain wall and window packages, driven in part by Building Safety Fund demand. As at the end of March 2024, there were 4,329 residential buildings 11 metres and over in the programme, with 77% of works yet to complete. With 2,361 buildings yet to reach site this is a trend predicted to continue. With new Building Safety requirements having the potential to delay value engineering in -re-construction, early contractor involvement is becoming more essential than ever to deliver public sector projects on time and to budget.