Materials shortage affects the Below Ground Drainage, Sewer and Surface Water Management Products Market
As with other sectors of the construction industry, the pandemic has had a major impact on drainage, sewer and surface water management works, more so for housebuilding rather than civils works, where most work is undertaken outdoors where it has been easier to apply social distancing measures. This has led to a decrease in sales of below ground drainage sewer and surface water management products in 2020.
For 2021, it is forecast there will be a modest return to growth as the construction industry has returned working at almost full capacity. However, several factors will have constrained growth, most notably the impact of the pandemic across global supply chains, including in the UK construction industry where there is a shortage of many types of products and materials. This has been due to a combination of the dislocation of containers around the world and the surge in global demand for materials such as timber, steel and polymers as economies return to some semblance of normality after the lockdowns of 2020.
In the UK this has been compounded by the impact of ‘Brexit’ on the implementation of new documentation processes at containers ports and Dover, where most shipping from the EU comes into the UK, and the return home of many EU construction workers.
The main polymer use in the manufacture of below ground drainage, sewers and surface water drainage is PVC-u, with PE and PP also being important particularly in the production of large diameter pipes and surface water / stormwater management products. However, ProdCom data shows that UK manufacturers sales for rigid tubes and pipes of all three polymer types were down sharply in 2020.
Abdul Tantouch, Research Manager at AMA Research, comments on the materials shortage –
“shortages of materials due to the global dislocation of containers and surge in global demand for timber, steel and polymers will likely last throughout 2021 and well into 2022. Long term issues influencing growth in the market include the shortages of tradesmen and construction professionals which was partly due to lower levels of activity in the industry thereby masking a systemic shortage of construction trades, but the UK has been compounded by the impact of new post-Brexit processes at ports and the return home of many EU construction workers.”
However, over the course of 2021, as economies around the world have been recovering from the impact of the pandemic, demand for plastic products has soared. Europe is a net importer for polymer and so is particularly vulnerable to market disruptions. Since Q1 there have been severe shortages of polymers – particularly PVC, PE and PP -and additives for plastics converting leading to huge price increases in Europe.
Over the next five years and into the longer term, it is forecast that demand will grow for below ground drainage, sewers and surface water management products and systems. The key drivers behind this are the anticipated growth in population and ‘urban creep’ and forecasts for increases in major flooding.