Optimism in the aluminium sector has bucked all current construction trends with more than three quarters (77%) of businesses looking forward to increased sales in the coming quarter and nearly 40% looking to grow by over 5%.
The figures come in stark contrast to last quarter’s forecast where only 6% of members were looking to see increases, according to the State of Trade Survey from the Council for Aluminium in Building.
“Sales Volumes – Quarter-on-Quarter for CAB Members shows prominent growth with 38% of the Membership reporting ‘Up by over 5%’ compared the previous quarter,” CAB CEO Phil Slinger said.
“The emphasis on growth is even greater on Sales Volumes – Year-on-Year indicating the fenestration industry is emerging from a slight dip, but nevertheless remaining positive in the last 12 to 18 months.
“Historic Unit Costs show a slight softening over the last 12 months on net balance of respondents with 54% on CAB Members stating increases on a quarterly basis, but this still remains at a high level. Expected Unit Costs show a slight slip, softening with 62% on net balance expecting further increases where CAB Members match that of the wider construction supply chain.
“Reinforcing the slight softening in the Historic Unit Costs is shown in the Cost Factors reported by CAB Members. Whilst 46% of members now report raw materials on net balance as an influence on cost, this is down from circa 70% in the previous 12 months. Whilst energy costs have softened slightly the cost emphasis remains high on wages and salaries with 92% reporting to be the most influential cost factor this quarter which has remained high for the last 12 months.
“Likely Constraints on Activity Over the Next 12 Months remains squarely on the continued market demand. Capacity also raises it head as a constrain at 23% this quarter, not seen in the past Q3 and Q4 in 2022, suggesting some respondents are already working near to their capacity. Labour availability has softened over the year at now just 8% respondents reporting as a constraint compared to 15% 12 months ago
“With 33% of CAB Members reporting an Expected Capacity Utilisation of 33% over the next quarter, which is little change over the last 12 months, suggests that the market has excess capacity for growth in the coming year. CAB Members continue to exceed the Expected Capacity Utilisation of the wider construction supply chain.
“CAB Members have changed emphasis on its Labour Force over the last 12 months whilst this quarter sees 17% of net respondents on balance increasing their labour force in the last year, 67% state on net balance that they are seeking to increase their labour force. This is a reversal where 12 months ago 62% had increased their labour force in the previous 12 months. This suggests a decrease in labour force over the last 12 months and an expectation of an increase in labour requirements in the next 12 month.
“Labour costs remain a very high cost for both CAB Members and the wider construction supply chain. Over the last two quarters expected labour costs for the year ahead is greater than the past years increases suggesting further pressure on labour costs in the next 12 months across CAB Members and the wider construction industry.
“Capital Investment and therefore confidence in the fenestration market across the membership remains high with 75% of respondents stating that they have and continue to, on net balance, invest in plant and machinery. This investment is closely followed by 50% investing in new product development.”
