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Gravel, Sand & Clay Extraction in the UK - Industry Market Research Report

United Kingdom gravel extraction market: £2.2 billion industry by 2019


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2014-02-24 20:21:01 - Gravel, Sand & Clay Extraction in the UK - Industry Market Research Report - a new market research report on companiesandmarkets.com

The United Kingdom gravel extraction market and clay extraction industry has crumbled over the five years through 2013-14. The industry was undermined by the collapse of construction activity brought by the economic crisis. Gravel and sand are used extensively in the production of cement and concrete, and clay is used to make bricks and roof tiles. In the aftermath of the financial crisis, the construction industry contracted sharply and few new builds were begun, forcing operators to slash their extraction volumes. As a result, both output and prices have plunged over the past five years, as the industry has wrestled with oversupply.

Profit fell even more steeply, as firms lost the economies of scale associated with bulk supplying. A grain of

 

 

good favour fell on the industry when the government decided to extend a freeze on the Aggregates Levy, keeping the rate fixed at £2.00 per tonne. This provided some protection for profit margins and, in the case of many firms, softened a loss-making position. Over the five years through 2013-14, IBISWorld estimates industry revenue to decline at a compound annual rate of 3.7% to £2.3 billion, reflecting the disastrous effect of the financial crisis on construction activity in the United Kingdom. Revenue is expected to drop by 2.1% during 2013-14.

The industry will have no option but to wait for construction activity to recover.

However, the improvements will not be immediate and industry revenue will decline heavily over the first half of the period. Demand is expected to improve slowly in the second half, when year-on-year growth will return. The resumption of government spending on construction projects shelved because of the financial crisis is likely to support this. The housing market is projected to stabilise in the years through 2018-19 as population growth eventually restores residential building demand and boosts the industry favourably. Profit is projected to recover slowly as the industry goes through a period of consolidation and reorganisation. Recycled aggregates are set to shape the product landscape.

Industry revenue is expected to contract at a compound annual rate of 0.8% over the five years through 2018-19 and reach £2.2 billion.

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