UK construction and building manufacturers are riding high on a wave of newfound confidence, as figures reveal a "dramatic" uplift in sales revenue and purchasing.

Small and mid-sized firms saw their average sales jump by 126% in the third quarter of this year (from £248,562 in Q2 to £561,898), while the number of purchase orders (POs) placed with suppliers was also up by 97% (from 130 in Q2 to 256), according to a report from inventory management software provider Unleashed. 

Construction and building manufacturers saw the fifth biggest jump in sales revenue out of all the 12 manufacturing categories analysed. It also saw the seventh biggest rise in POs. 

Revenue and POs were both up by 88% across the manufacturing sector – signalling high confidence among consumers, retailers and other businesses. 

The Manufacturing Health Index assesses SME manufacturer performance via a big data approach. Starting with a cohort of around 1,300 manufacturers in the UK, Australia and New Zealand, the Q3 2024 report draws on data from every purchase, sale and stock movement made by each business in the study between Q1 2018 and Q3 2024. 

Ted Bromley-Hall, Managing Director at UK landscaping products manufacturer IBRAN, said: "Customers are becoming ever more price focussed but don't want to sacrifice quality in pursuit of it.

"We've made a concerted effort to highlight the fact that all our products are made here in the Midlands, using raw materials sourced locally. The benefits of this to the customer are that they are able to work on an assured margin, knowing that layers of handling aren't inflating their price point.

“We are not the cheapest manufacturer but we are the only ones able to produce sustainable, quality, premium products at a below average price point, and over the course of the last 6-12 months we've seen a 200% increase on last year's demand."

The report also shows that construction and building manufacturers are buying more inventory in anticipation of further orders. 

It comes as the government announced in its recent Autumn Budget an investment of £13 billion next year to ‘rebuild Britain,’ which includes the creation of 1.5 million new homes and infrastructure projects. There are also funding opportunities through the Net Zero Innovation Portfolio – a £1 billion fund to develop green technology. 

Construction output increased by 0.8% in Q3 2024 working out to £444 million, compared to the same period last year. And 2% of the growth is because of new work. There has also been an estimated 1.3% increase in private housing repair and maintenance this year with eight out of nine construction sectors reporting an increase in work.

Joe Llewellyn, GM of Cloud ERP at The Access Group, the parent company of Unleashed, said: “This uptick in sales revenue and purchasing bodes well for the manufacturing industry. 

“Firms are buying more inventory – and while this might bring back bad memories of post-Covid disruption, when manufacturers were forced to adopt a ‘just in case’ strategy – it’s actually a positive sign in the current climate.

“Lead times remain low, so the orders we currently see flowing through the supply chain look like genuinely robust business confidence.”

“It will also be interesting to see what impact the recent Autumn Budget will have on the wider manufacturing industry. On the one hand, business leaders have warned that rises in National Insurance, minimum wages and business rates will hit them hard.

“However, the government has pledged to invest in housing, public infrastructure, clean energy and technology, which could provide a welcome boost to manufacturers in the construction, energy and electronics sectors.”