Over 70% of aluminium businesses saw sales increase in the last quarter but fewer than a third see this continuing into the coming three months, according to the latest State of the Trade survey from the Council for Aluminium in Building.

Even more strikingly, the 29% of members forecasting increases in their sales had plummeted from 90% in the previous quarter, the report continues. However, the longer forecast for the year ahead is more balanced with 59% showing optimism.

Raw materials costs continue to dominate members’ concerns, with fuel, wages and energy costs close behind.

Chief executive Phil Slinger said: “Whilst a subdued forecast compared to the last quarter, it must be remembered that the forecast is still positive for growth. The CAB members expectations closely follow that of the wider Construction Industry.”

He continued: “Actual Sales Volumes, year on year, indicate that 71% of members see an increase in sales of over 5% this is balanced with just 6% of members seeing a reduction in sales down by over 5%. This is to be expected as we come out of the Covid crisis, but with 53% of members seeing an increase in sales of over 5% compared to the last quarter, this could further indicate a slowing down in sales.”

“As would be expected, members see that Historic Unit Costs have risen and Expected Unit Costs are anticipated to rise even further. It is interesting to see that 87% on balance of the wider Construction Industry are having the same issues suggesting that not all construction sectors are affected.

“Reviewing the Cost Factors, we see that raw material costs continue to be an influencing factor as they have been year to date, but this is now matched by increases in fuel costs, wages and salaries, closely followed by energy costs. Inevitably these rises in costs will have to be passed down through the supply chain.

“Likely Constraints on Activity Over the Next 12 Months is dominated by the concerns over Demand and Materials Supply. Whilst Demand has been a concern throughout the year, Materials Supply concerns have dominated both the second quarter and this reported quarter.

“Whilst the CAB membership generally experience a strong market sector when compared to the wide construction market, in the third quarter we see for the first time that both Historic Capacity Utilisation and Expected Capacity Utilisation lags behind that of the wider construction market. This suggests that the market problems are becoming worse for aluminium fenestration, facade and building envelope products, this could be due in part to the rising costs of aluminium and its shortage of supply.

“The historic Labour Force demand has changed since the quarter one report, which was 15% negative to a 41% on next balance for the last quarter. It is reported that labour costs have risen and are expected to rise further in the coming year. Again, the CAB membership experience slightly higher demands than the wider construction sector on net balance.

“Exports have held up well for CAB members in 2021 and this quarter report suggest that members see further growth in exports for the year ahead. Interestingly, the wider construction sector has seen a historic drop on net balance for the past year with 30% on net balance suggesting that sales have reduced in the last year.

“Capital Investment has seen a fall during the year for CAB members and whilst members are optimistic about further investment in the year ahead, the dominant investment is seen to be in Plant and Equipment. This investment is likely to ensure that processes remain as efficient as possible and reduce wastage.

www.c-a-b.org.uk.

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