Type “Brick Shortage” into a search engine and it will return thousands of hits. TV news editors have despatched their dashing reporters (in brand new wellies) to stand uncomfortably in puddles of clay, while stolid men in boilersuits tell them that business is good. In fact, business is better than it’s been for at least five years. Behind them lie huge stacks of russet-coloured facings, wrapped in steel bands. So where’s the shortage?
Elsewhere, red-faced contractors’ buyers roar down the phone at merchants, frustrated by lengthening lead times and prices which have firmed up in recent months. Site managers are screaming for another ten thousand as the brickies shrug, heading for an early finish since they have no more bricks to lay. Perhaps there really is a shortage on some sites - and might we stop specifying bricks as a result?
The downturn of 2008 saw house-building collapse to a level not seen since the Great Depression, and because so many spec houses are clad in brick, its makers suffered. The industry carried on making bricks for a while, but eventually it was left with a stockpile of 1.2 billion unsold bricks – around half a normal year’s demand. Accordingly, it began mothballing and closing factories for good - for example, Hanson shut five plants and reduced its workforce by half. UK brick production fell from almost three billion per year in the first half of the 2000’s, to around half that level.
In Scotland, Errol Brick closed for good in March 2008, and Caradale Traditional Brick closed both their works in September 2011. As I wrote earlier, that leaves only Raeburn Brick with an active brickworks north of the border – and Jimmy Raeburn noted that his factory can meet about 15% of Scottish demand. Suddenly, the market is recovering strongly and house-building is leading that. However, the narrative in the media is that brick shortages are holding back the recovery. Can the brick manufacturers meet pent-up demand? Is the Great 2014 Brick Shortage just a newspaper scare story?
From a peak level of around 200 million bricks produced each month in 2007, demand dropped below supply and during a couple of troughs in 2009, fewer than 40 million bricks were delivered to site each month. However, ignoring the annual cycle of shut-downs (many brickworks close for planned maintenance every December), the trend is upwards from around 100 million a month in 2009, to around 150 million per month this year.
So the evidence is that brick-makers have responded to demand by increasing production. Hanson, for example, plans to reverse the 2010 closure of a plant at Claughton in Lancashire by the end of the year, and is putting on additional shifts at two other works. Even during the darkest years of the recession, the larger, well-capitalised brick companies were actually building capacity, in anticipation of the recovery. Hanson built a new factory at Measham in Leicestershire in 2009 and Ibstock opened a new factory at Chesterton in Staffordshire in 2013. Between them, they made an investment of £75m which bolsters supply by bringing new more efficient “super brickworks” on line.
On analysis, the problem may actually derive from the demand side. Much of the panic seems to arise from the low stock levels which brick merchants are carrying at the moment, and the fact that there’s a lead time of several weeks on many types of brick. Bear in mind, though, the luxurious position which contractors enjoyed three or four years ago, when almost any quantity of bricks could be had “ex stock”, and full artic loads could be called off instantly … provided you had good credit.
How that demand works in practice is that brick production in September 2013 was 14% higher than the year before, but stocks were 34% lower and imports were 34% higher. Hence production was increasing, but demand outstripped it and was met by a combination of imports and running down stockpiles. However, the peak in brick consumption may not be a natural result of an open market.
It’s been reported that some house builders are panic-buying or trying to arrange exclusive access to certain bricks. If that’s the case, then the Great 2014 Brick Shortage is both a self-fulfilling prophecy – the more people worry about it, the worse their actions make it – and a symptom of the chaotic way the construction industry moves from trough to peak.
The brick makers could cope with either of those conditions if the market remained steady, but the really tough times come when demand halves or doubles in the space of a year or two. The lead-in time for a new brickworks isn’t the 18 months it takes to build and equip the brick factory itself, but the five or more years required to battle through Planning inquiries, receive minerals extraction consents then finally open up new clay pits to feed it.
It’s the cyclical nature of the construction industry which is the real problem, acting like a Great British Whale which rises from the ocean depths and spouts out a vast plume of work, before diving into an abyss for the next few years.
What the brick firms must hope is that this “shortage” doesn’t turn into a long term re-run of the 1940’s and ‘50’s. Britain suffered an even greater shortage of bricks in the years after the Second World War when everything was in short supply, and building licences were required before construction could start. One consequence was the rise of prefabricated metal and timber houses, plus concrete system building. By the building booms of the 1960’s, the brick industry had vastly increased its capacity, and was able to compete with “modern methods of construction”. Sounds familiar?
However, the interactions of the market don’t affect bricks in isolation. In the post-war era, steel was also in short supply and since reinforced concrete uses far less steel (in the form of rebar) than a pure steel-framed building would, then both in-situ framed and precast panel systems gained in popularity. You could accuse them of opportunism, but in the last few weeks, a well-known Aberdeenshire timber kit firm has begun marketing its frames to house-builders in the south-east of England.
The Great 2014 Brick Shortage headline does little to help, as the industry goes from glut to scarcity and back again in the length of time it takes to plan, build and bring a brick factory into production. What’s needed is long term stability so that brick can be considered calmly alongside timber kit, steel frame or the various SIP’s and hybrid panel systems coming onto the market. Perhaps a steady demand will encourage a manufacturer to build a new brick factory in Scotland, as I alluded to here in a previous piece.
After all, the opencast coal industry was recently rescued by Hargreaves after Scottish Coal and ATH Resources folded, and one of coal extraction’s “by products” is vast quantities of fireclay, which would otherwise be ploughed down during land remediation…
