Brick sales come tumbling down

This is not the end. It is not even the beginning of the end.

It’s not a good time to be trying to sell anything even slightly on the heavyside. Yesterday’s State of Trade Survey from the Construction Products Association shows that the heavyside is suffering the effects of the credit crunch-triggered housing collapse more than most. Only to be expected, of course, since it’s the heavy materials, the bricks, the tiles, the blocks that go in first. The lucky old lightsiders are still selling goods to go into the houses that have actually been built, finished and maybe even sold. But, be warned, their time will come. And the knock on effect will knock on.

It’s also not a good time to be selling bricks to the volume housebuilders as the fact that Southern Brick are now in administration will testify. Brick sales are in a parlous state. If developers can’t even think about starting housebuilds, they’re not going to be buying lorry-loads of bricks from anyone. It’s not even as though there was a massive boom before the bust either, thanks to the developer’s insistence on building flats and luxury apartments instead of houses So the manufacturers are reacting accordingly. Ibstock shut Tannochside in May, Hanson closed Stewartby in February and last week announced the closure – two years early – of the old Red Bank brickworks at Measham, although their fantastic new state-of-the-art replacement is still on course for completion.

This last closure is directly a result of the current market situation, with one spokesman reported as saying that they have so many unsold bricks in stock they simply can’t make anymore at the moment.

What’s more than a little concerning to those of us who remember only too clearly the last recession – if that is what we are heading into – is that you get more companies going to the wall when things pick up than you do when things are getting bad. I hate the thought of this but we might just be seeing the tip of the iceberg, with more bad news to come from companies with heavy exposure to the housebuilding sector.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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