One of the country鈥檚 biggest brick makers is consulting with staff over jobs after announcing that demand for its products deteriorated through the summer.
The slowdown in 海角视频 construction 鈥 with housebuilding experiencing one of its worst months for 14 years in September 鈥 has contributed to brick maker Forterra launching a consultation with workers over mothballing its factory in Claughton, Lancashire, along with cuts to production in its Aircrete business. Forterra employs around 1,800 people in the 海角视频, across 17 sites.
In an announcement which also saw it downgrade its profit forecast for the year, the Northamptonshire business said: 鈥淭he signs of market improvement seen in May and June did not continue into the second half with market demand deteriorating in July and August.
鈥淔igures published by the Department of Business and Trade show 海角视频 brick despatches in July and August 2023 averaged 16 per cent lower than in June 2023, and 28 per cent lower than in the corresponding period in 2022.
鈥淲ithin this, August was weaker than July and our own despatches suggest a further softening in September.
鈥淭hese figures also highlight that 海角视频 brick industry despatches are currently running below the levels seen in 2009.
鈥淔ollowing previously announced management actions, we have taken further steps to align our production levels with market demand.
鈥淐onsultation is currently underway on the mothballing of a further brick factory at Claughton in Lancashire along with cuts to production in our Aircrete business.鈥
Despite the challenges Forterra said pricing across its range of products had remained resilient overall.
It recently completed work on Europe鈥檚 biggest brick factory in Desford, Leicester. Recent teething problems there, it said, had not impacted sales due to the weaker demand.
The new Desford factory includes innovations in areas such as robotics and advanced packaging. The bricks made there will have a carbon footprint about 25 per cent lower than those from the old factory on the site.
The business said: 鈥淟ooking ahead we expect to manage our operations on the assumption that 2024 demand will be at a similar level to 2023 and, accordingly we will look to align production output with this level of sales, thereby limiting further inventory growth.
鈥淎s we set out at the half year, we expect FY24 results to benefit from a more stable energy cost environment, a stabilisation of customer inventory, the substitution of imported bricks as well as the full year benefit of previously announced cost reductions, offset by reduced operating efficiency driven by a reduction in production.
鈥淕rowing political focus on increasing housing supply ahead of a general election reinforces the board's confidence in the long-term industry fundamentals and the board remains confident that the group remains well placed to benefit when market demand recovers.鈥
