BY PHIL SLINGER CAB CHIEF EXECUTIVE

A fall in sales for heavy side firms would indicate a reduction in project starts and as fenestration requirements can be up to twelve months from project starts , CAB Members are still reporting strong Historic Sales , 54 % on net balance , which is stronger than Members reported in Q2 .

As recipients completed the State of Trade Survey in early October , forecasts will be viewed in light of Kwasi Kwarteng ’ s minibudget revealed on the 23rd September .

With the mini-budget in mind , looking forward the outlook is not as optimistic with 15 % of Members on net balance expecting a fall in sales in the next quarter and only 8 % on

net balance indicating a growth in sales for the year ahead . This shows a dramatic change in outlook since Q2 where Members forecast 52 % growth on net balance for the next quarter and 38 % growth on net balance for the year ahead .

It would be expected that forecasts could bounce back as the UK government appears to have stabilised the financial markets with an emergency statement by the new chancellor , Jeremy Hunt on the 17th October .

Sales Volumes - Quarteron-Quarter , the majority of Members , 54 %, are reporting an increase of over 5 % growth , only 15 % of Members reported a reduction in sales of up to 5 %. This shows a little softening over Q2 where 67 % of Members reported an increase , quarter on quarter , of over 5 %. Sales Volumes - Year-on- Year continue to show strong increases .

Historic Unit Costs remain high for all construction product companies , but do show a slight softening over Q2 figures . Expected Unit Costs are forecast by all companies to remain high for the next quarter and year head .

Energy costs remains the biggest influence on Cost Factors with Members reporting increases 100 % on net balance . Fuel costs have softened a little since Q2 where it was reported as the biggest influence at 100 % on net balance . Third most influential , Wages & Salaries has softened a little since Q2 falling back to 77 % on net balance .

Likely Constraints on Activity Over the Next 12 Months reported during 2022 , remains product Demand . This has increased over the year from 46 % of respondents in Q1 to 77 % in Q3 indicating uncertain times ahead for Members .

Historic Capacity Utilisation , members reporting operating above 90 % of capacity has grown since Q1 from 23 % to 54 % in Q3 quarter on quarter . Expected Capacity Utilisation looking to the next quarter 38 % and year 46 % of members reporting operating above 90 % of capacity indicates reasonable long term order books . Members Expected Capacity Utilisation is just slightly ahead of that reported by the wide Construction Industry .

The pressure on labour costs has softened slightly with a reducing number of Members on balance reporting increases , however , pressures remain and 85 % of Members on balance see this as an ongoing concern . Members fears of increases in labour costs is ahead of the wider Construction Industry suggesting a lack of an available skilled labour pool .

In Q1 and Q2 Capital Investment on net balance has centralised on Product Improvement , in Q3 this has changed and now the emphasis both in the past year and year ahead , is centralised in Plant & Equipment . This could be as result of pressures on reducing costs by introducing more energy efficient machinery . This is supported by the fact that members have also increased their Capital Expenditure in property growing from 33 % in Q1 and Q2 to 50 % of Members on net balance in Q3 .

www . c-a-b . org . uk

36 DECEMBER 2022

CLEARVIEW-UK . COM