CPA Weekly Notes-10th-January-2025

Issue No. 1132, 10th January 2025 FOR MEMBERS ONLY

Association Activities

Construction Trade Survey 2024 Q3

Construction product manufacturers reported a second quarter of growth in sales volumes, although for the heavy side, sales remained lower than a year earlier. Members can access the latest survey here.

Recommended Watching: Grenfell Inquiry Debate in Parliament
A debate took place in the House of Commons this week about the Grenfell Inquiry findings and recommendations for Government’s response. The debate can be viewed on Parliament TV (from 18:27 for approximately three hours). Alternatively, a transcript is available on the TheyWorkForYou website.

CPA / BSR Workshop re BS476 – 22 January 2025
The CPA and Building Safety Regulator are hosting an ‘in-person’ workshop for members on 22 January to discuss with officials from the BSR the changes Government wants to make to BS 476. Particular sectors affected include doors, ironmongery and rooflights, though many others may be affected as this standard covers fire testing and certification. The workshop is scheduled for 10am at the Broadway House Conference Centre, Tothill Street, London SW1H 9NQ. Please indicate your interest to attend by contacting emma.gange@constructionproducts.org.uk.

CPA Weekly UK Economic and Construction Update
The latest weekly update is available here, including:

The latest weekly update is enclosed, including:
S&P Global UK Construction PMI (December 2024)
HMRC UK Residential Property Transactions (November 2024)
Bank of England UK Mortgage Approvals (November 2024)
Nationwide UK House Price Index (December 2024)

The CPA’s Winter forecasts will be published on Monday 27 January and will be available for members to download from the CPA Website.

CPA Weekly Calendar of meetings

Peter Caplehorn, CPA Chief Executive, will have three separate private meetings with MPs to discuss issues relevant to CPA members, including Lola McEvoy MP (Darlington), Martin Vickers MP (for Brigg and Immingham) and Dr Kieran Mullen MP (Bexhill and Battle); will meet with directors at the MHCLG, OPSS and Building Safety Regulator to discuss product issues; will co-chair the Construction Leadership Council’s Material Supply Chain Group monthly meeting; and attend a regular meeting of the CLC’s Task Force.
Jeff May, CPA Deputy Chief Executive, will meet civil servants at MHCLG to discuss engagement with SMEs in the products sector; and will attend a roundtable discussion with Andrew Griffith MP (Shadow DBT Secretary);
Mark Wilkinson, CPA Senior Technical Manager, will meet with members of our sister EU trade association the Construction Products Europe to discuss how the current Construction Products Regulation (CPR) foresees the delivery of the Declaration of Performance (DoP) in a digital format; and participate in a Future Homes Hub and NHBC meeting about the challenges of maintaining quality whilst meeting the government’s housing targets.
Jane Thornback, CPA Sustainability Policy Advisor, will attend a regular meeting of the CLC’s Green Construction Board’s secretariat with DBT.
Hanna Clarke, Digital and Policy Manager, will have a variety of meetings with industry colleagues and government around competence.
Rob Lee, Senior External Affairs Manager, will accompany Peter in the three private meetings with MPs this week.

Economy Updates

Economy

The S&P Global PMI for construction was 53.3 in December, down from 55.2 in November and the lowest for six months. Nevertheless, the index has posed above the 50.0 no-change threshold since March 2024 and the latest reading still signalled a solid upturn in overall construction output. Commercial activity was the fastest-growing area of the construction sector in December (index at 55.0), followed by civil engineering (52.9), although both categories saw a slowdown in the rate of business activity expansion since November. Residential work was again the only category to register an overall decline in output during December (47.6). House building activity has now decreased for three consecutive months and the latest reduction was the fastest since June 2024. Survey respondents noted that subdued demand conditions, elevated borrowing costs and weak consumer confidence had all weighed on activity.
The S&P Global PMI for manufacturing fell to an 11-month low of 47.0 in December, down from 48.0 in November and. The PMI has remained below its neutral mark of 50.0 – signalling deterioration – in each of the past three months. The downturn was widespread in nature, with similarly sharp rates of decline across the consumer, intermediate and investment goods industries. Although output was scaled back at both SMEs and large-scale producers alike, the downturn was noticeably deeper at SMEs. Lower production volumes mainly reflected subdued domestic market sentiment, customer destocking, efforts to prevent inventory building up at manufacturers’ own warehouses and the impact of weaker demand from European clients. Total new business fell for the third straight month and at the quickest pace since October 2023.
The S&P Global PMI for services was 51.1 in December, up from 50.8 in November, and above the neutral 50.0 value for the fourteenth consecutive month. Subdued sales pipelines continued to hold back business activity growth in December. The latest survey indicated that total new orders were close to stagnation across the service economy. The respective index was the lowest since October 2023 and pointed to only a fractional increase in total new work. Anecdotal evidence typically cited falling confidence among clients in the wake of the Autumn Budget, especially due to forthcoming increases in employers’ National Insurance contributions. Where new business growth was reported, this was often linked to resilient demand for technology services.
According to the BRC-KPMG retail sales monitor, UK total retail sales increased by 3.2% year on year in December. Food sales increased by 1.7% and non-food sales increased 4.4%. For 2024 overall, total Retail sales increased by 0.7% from 2023. Food sales growth was 3.3% and the non-food sales declined 1.5%.

Housing

According to Halifax, UK house prices decreased 0.2% month-on-month in December, which follows five months of increases. In annual terms, house prices were 3.3% higher, slower than the 4.7% growth registered in November. The average UK house price was £297,166.

For further information contact rebecca.larkin@constructionproducts.org.uk

Parliamentary and Government Update

Reforms to the Energy Performance of Buildings Regime
This consultation seeks views on the reform of the Energy Performance of Buildings (EPB) framework. It covers the following areas:

clarifying and consolidating regulations, and focusing on improving the applicability, quality, and data usage of energy certificates in domestic and non-domestic buildings
updating EPC metrics
refining requirements for Energy Performance Certificates (EPCs) and Display Energy Certificates (DECs)
improving data management protocols and strengthening quality control
revising air conditioning inspection reports (ACIRs)

This consultation is scheduled to last for 12 weeks from 4 December 2024 to 26 February 2025.
Further details can be found here.

Planning Reform Working Paper: Planning Committees
The Government is inviting views on changes to planning committees. This paper forms part of a series of working papers on different aspects of planning reform, designed to inform further policy development in collaboration with the wider sector. It proposes options for change to planning committees in England that would support the plan-led system, including the introduction of a national scheme of delegation, a new system of targeted committees for strategic development, and mandatory training for committee members. Details on how to respond can be found here.

Clean Power 2030 Action Plan
Government has issued a Clean Power 2030 Action Plan which sets out a pathway to advance its mission. The plan sets out what government will do to support and accelerate delivery of the new infrastructure needed.

Plan for Change: Rebuilding Britain
The Government published its “Plan for Change” document that provides further information and milestones for ‘Rebuilding Britain’. Key points and some analysis include:

The Government has announced that they will produce10-year strategies for housing and infrastructure next spring, with clear priorities, plans to deliver and a pipeline of projects for investors and supply chains. This is a new announcement, and Inside Housing are reporting that the housing strategy will be published in late March, alongside details of the next multi-year Affordable Homes Programme.
The Government has also committed to “fast-tracking planning decisions on at least 150 major economic infrastructure projects.” The 150-figure is a new target, as stated by Starmer: “We will streamline the approval process in the forthcoming Planning and Infrastructure Bill. And, driving through reform, I can announce another new target. Not just 1.5m homes, but also 150 major infrastructure projects.”
The Government has committed to reforming the planning system so that it is “pro—growth and pro-infrastructure”. They have reaffirmed their commitment to publishing a new National Planning Policy Framework by the end of 2024, so this can be expected in the near future.
They state that “for the first time we will strategically join up decisions on housing, business growth and infrastructure at both a national and local level, with the Westminster government’s industrial, housing and infrastructure strategies aligning with the local growth plans and strategic development plans led by mayors.”
They have recommitted to delivering 1.5m new homes.
As set out at the Budget, the Government have committed to providing an additional £500m in the Affordable Homes Programme, taking its annual budget to £3.1bn next year.

Industry News

Trade Credit insurance: what it is and how could it benefit my business?
Trade Credit insurance protects your business should your customers fail to pay due to poor cash flow, insolvency, or even delayed payments. Not only does Trade Credit insurance protect your business against the risk of bad debts, it also:

provides improved insights into credit risk management processes and procedures
helps improve your business reputation and stability, through the monitoring of trade debtors
frees up cash from bad debt reserves that can be put to better commercial use elsewhere in your business
enhances profitability and competitiveness through flexible credit terms
gives confidence when trading both domestically and internationally

The Channel Partnership are a specialist trade credit insurance broker and surety bond advisors, that help companies like yours manage their credit risk and help them trade with confidence. As experienced experts across multiple industries, including the construction sector, the team help find Trade Credit solution that are tailored to your company’s needs. To find out more about Trade Credit insurance and how it could benefit your business, get in touch with the team here.

Trade Mission to India (17-21 March)
Due to unforeseen circumstances, the Department for Business and Trade’s Built Environment trade mission to India has been postponed to 17th -21st March. The delay may offer CPA members another opportunity to consider joining it. The deadline to express interest is 16th January. For the Expression of Interest and information on the mission please click here. If you have questions please contact the DBT team here.

Study to develop evidence base for bespoke construction products
The Office for Product Safety & Standards (OPSS) which sits within the Department for Business and Trade (DBT) has commissioned the Centre for Strategy & Evaluation Services (CSES) to conduct a study to develop its evidence base on “bespoke” construction products. This research will review current practices regarding the interpretation of the term bespoke and assess how these practices align with the existing regulatory framework (i.e. products falling under Article 5 of the Construction Products Regulation). This research will form a baseline, on which future research proposals, focusing on different aspects of the construction products’ supply chains, are expected to be developed. The survey should take no longer than 10-15 minutes. If you have any questions, please contact the CSES Project Manager, Rocio Salado at the following address: rsalado@cses.eu.
The deadline for responding is 17 January 2025. If you wish to prepare your responses in advance, you can download a PDF version of the survey questionnaire here.

Government to review and decide in 2025 on the role of hydrogen in heating
Government has issued a review of the role of hydrogen in heating homes and has announced that in the first part of 2025 it will assess the latest evidence before consulting on the way ahead. It wants to provide strategic clarity on decarbonising home heating as part of its mission to deliver Clean Energy in the UK. For further information contact Jane Thornback.

The Industry Competence Steering Group (ICSG) Announces Restructure and Renewed Focus on Competence Within the Built Environment
The Industry Competence Steering Group (ICSG) has today announced a comprehensive restructure to enhance competence and safety standards across the built environment. Established in response to the Grenfell Tower Fire and subsequent Hackitt Review, ICSG has now transitioned to become a formal working group of the Industry Competence Committee (ICC) under the Building Safety Regulator (BSR), signalling a strategic shift towards more rigorous industry-wide competence frameworks. Please go here to learn the details.

New Code of Practice for fire and escape door hardware has been published by GAI and DHF
A comprehensively revised Code of Practice for the selection of building hardware for fire-resisting and escape door assemblies and doorsets has been published by The Guild of Architectural Ironmongers (GAI) and the Door & Hardware Federation (DHF). This new edition, issue No. 5, is the first revision in more than a decade, and represents a significant update and consolidation of previous guidelines to reflect the very latest legislative requirements and best practices in the industry. The new code can be found in detail here.

CPA In The News

Should we prepare for growth in 2025?
Future Trends surveys as well as insights from the Construction Products Association (CPA). Noble Francis, economic director of the CPA, said its data corroborates that 2024 had been a difficult year in construction.
RIBA |13/12/2024 | Print

What economists say about the UK’s outlook for 2025
Noble Francis, economics director, CPA: The UK’s GDP growth in 2025 is likely to 1.6 per cent. This growth would be substantially better than G7 economies such as France and Germany. In France, tighter public spending and poor consumer and business confidence are likely to constrain economic activity whilst in Germany, manufacturing output is likely to continue to suffer, especially in energy-intensive sectors. However, UK GDP growth in 2025, is still likely to be considerably slower than GDP growth in Canada and the US, where there are considerably stronger economic prospects over the next 12 months and GDP growth is likely to average over 2.0 per cent in both countries.
FT.com | 03/01/2024 | Online

I am really optimistic about the outlook for roofing, insulation and cladding
It was great to see the Construction Products Association’s Autumn forecast figures suggesting that total construction output is forecast to rise by 2.5% in 2025 and 3.8% in 2026, hopefully boosted even further by the government’s focus on building new housing.
Total Contractor| 18/12/2024 | O nline

Builders demand more immigration to deliver Starmer’s homes pledge
The latest Construction Products Association’s (CPA) estimates for 2024 indicate private new housing output will be 9% lower and repair and maintenance output 4% down both significant sectors for the use of timber as a material.
Telegraph | 06/12/2024 | Online

Analysis-Worker shortages raise doubts over Britain’s plan to build for growth
Britain has long lacked candidates to fill jobs, a problem made worse by the 2016 Brexit vote and COVID-19, with vacancies higher than their level before the pandemic. Its construction sector, as in many other countries, must also deal with many skilled workers nearing retirement age. The Construction Products Association predicts the sector is expected to lose 500,000 workers to retirement over the next 10 to 15 years, representing around 25% of the total workforce.
MSN | 13/12/2024 | Online
Also covered in: China Daily Asia