Writing on the Wall as Brick Industry Set to Crumble

In more bad news for the construction sector, GMB Union has warned The Secretary of State for Housing, Michael Gove, that the brick industry is “on the brink of collapse”.

The concern of the state of brick manufacturing follows the announcement of Wienerberger that they’re looking to lay off workers because of rising operating costs. These costs have been attributed to soaring energy prices, and unfortunately correspond to a general lack of demand for new housebuilding projects.

Weinerberger’s woes are far from an isolated case. There have been multiple brick manufacturers finding themselves struggling with the current economic landscape, most notably Ibstock, Marshalls, and Forterra.

GMB Organiser, Stuart Harrison declared that “the UK brick industry is collapsing at the same time as people are struggling to find housing. Houses simply aren’t being built and this government have failed to deliver on their promises.

“Without a thriving brick industry, the UK’s housing crisis can only get worse, whilst communities relying on these jobs are plunged into uncertainty”.

Unfortunately, it’s not just the brick industry that’s feeling the pressure of the slowdown in demand paired with rising energy costs. The construction sector in general appears to be in a state of flux, with The National House Building Council recently announcing that it has made significant losses on its modular homebuilding warranty scheme. The losses have materialised from the sheer amount of construction firms that have gone bust.

When a warranty claim is put in by a homeowner, it may have to be put right by a different construction company than the one who originally built it. This can often come at a higher price than that agreed with the previous company.

Every few weeks seems to bring with it another big-name casualty in the construction sector recently. Colmore Tang, a business that up until a few years ago was turning over just under £100m a year, entered voluntary liquidation at the end of November, while Squibb’s messy liquidation has dominated industry headlines since the start of December.

In most cases, the debts accrued had become so unwieldly that there was little option but to fold the company. Michael J Lonsdale is another that has appointed administrators recently. Their report revealed that the business owed a total of £65m to a mixture of creditors, employees, and HMRC.

Like many other insolvent construction firms, they cited the difficulty that the mixture of COVID-19, Brexit, and the Russian invasion of Ukraine as factors in their downfall.

With no immediately visible hope on the horizon for a change in economic circumstances, we could well be on the precipice of even more company losses in the construction industry as we enter 2024.

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