Stone sales in the UK – report April 2009

 

The UK stone industry got off to a good start last year, continuing the exceptional growth that started in 1996 and had continued on a general sharp upwards trend ever since. However, as the year progressed the reality of the recession started to bite and the bottom graph on the right shows what happened to imports of stone as the year went on. The year still showed an increase in the value of imports on 2007 overall, helped by the 15% fall in Sterling against the Euro and 25% fall against the US dollar during the year that increased the price of imports, most of which are priced either in dollars or Euros. Of course, the rise in prices must also have played its part in curtailing demand.

Imports account for the majority of stone sales in the UK. The indigenous stone quarrying industry is so small that no accurate figures for extraction of dimensional stone in the UK exist. Anecdotally, sales of British stone were pulled along with the general increase in demand for stone in Britain throughout the second half of the 1990s and into the new millennium.

Leading the growth in stone sales were the interiors market (especially granite and latterly engineered quartz worktops and limestone flooring) and hard landscaping. Both benefited from the falling price of imports thanks to the growth of first India and then China as the source of stone and the falling price of diamond tools to process granite.

Today, granite worktops are familiar in domestic and commercial kitchens and serveries in the UK and granite, sandstone and other stones (notably porphyry and some limestone) are the preferred choices of hard landscapers.

In other sectors the demand for stone also grew. Cities have always stone, internally and externally, for important buildings. But there has also been an increasing number of houses built with stone walls and archetectural masonry, particularly in those areas of Britain that have traditionally built in stone – the villages of The Cotswolds, Yorkshire, central southern England, Scotland and parts of Wales. Here, planners often insisted on locally produced stone being used to match existing buildings and preserve the vernacular character of such areas. But imports also benefited, as all over the country housing developments have incorporated stone fireplaces, and stone floors in reception areas and kitchens in particular, but not exclusively. Latterly, underfloor heating has increased the attraction of stone flooring in living areas. England has always had a lot of conservatories added to houses as a home improvement and, with underfloor heating, the attraction of natural stone flooring in conservatories has increased.

Hotels have been refurbished using marble and polished limestone for bathrooms and many offices have used marble, granite, limestone and other decorative stones for floors, wall linings, reception desks, stairs, lift surrounds and other public areas, as well as for cladding for the outer skins of the buildings.

The aesthetic for the natural beauty of stone has pervaded most areas of society in Britain and has been used in ever more interesting and intricate ways as the CNC technology for working stone has improved and become more affordable. Even waterjet cutting, which has not made a big impact on the British market, is beginning to be used for creating intricate patters, especially on flooring and paving.

The past 12 years have been a heady time for the growth of the stone market in the UK that has benefited the whole industry and seen a lot of new companies entering the market.

With the recession, some companies have already failed. Some of the smaller companies that needed to keep machinery working in order to pay off the loans that had financed them have already gone bankrupt. But it is not only small companies. Larger companies geared up to keeping a large workforce employed have also run out of money. It is a problem that has been exacerbated from the start of 2009 in particular by the banks withdrawing or reducing overdraft, factoring and credit insurance facilities and failing to lend for future development that would improve efficiency, tightening the cash flow squeeze on companies already finding it harder to get paid by their customers.

There is a feeling in the stone industry in the UK that the recession is worse than it needs to be because television and newspaper reporters have emphasised the gloom and led to people expecting a recession. Consequently they have reduced their spending and investment, so worsening the conditions that create the recession. It has been said in the UK that it is no longer prices that are guiding the invisible hand of the market but the Press.

As for the future: who knows? Just lately the BBC seems to have started reporting signs of recovery and if that creates rational expectations of recovery in the market, no doubt there will be a recovery. Certainly in the stone industry the New Year deep gloom seems to be giving way to a greater level of optimism as it no longer seems as if the end of the world is nigh and orders start to pick up. The exit from the market of some players will have reduced capacity and allowed the survivors to win more work. Some companies who reduced their workforces at the start of the year are recruiting again. As 2012 and the London Olympics approach, work from the leisure, hotel and catering industries keen to capitalise of this once-only opportunity is already coming through to stone companies.

 

 

Report from 2005: The rapid growth of the stone industry in the UK that began in the second half of the 1990s has continued into the new millennium, mostly fuelled by imports and much of it associated with the falling price of stone in general and granite in particular.

Since the end of the protracted period of inactivity in the construction industry that lasted for the first half of the 1990s, the stone industry has seen continuous growth.

According to a report* by Symonds Group (now Capita Symonds) for the Office of the Deputy Prime Minister that was published in 2004, the volume of dimensional stone imports had increased by 323% to 1,990,000tonnes by 2001 from a low point in 1996.

The stone industry is notoriously under recorded and difficult to pin down in terms of hard figures, but the limited statistics used by Natural Stone Specialist to track the market have shown continued increases in imports every year since then.

We use 16 categories (commodity codes) from HM Revenue & Customs as an indicator of developments. These figures underestimate the amount and value of stone being imported because they do not include all the dimensional stone that comes into the country. However, they do provide a snapshot of the market that can identify trends using comparable data going back to 1997.

Figures for 2004 show the biggest annual growth yet by volume (46%) although growth by value was only 17%.

This is a familiar trend, even if the divergence is unusually extreme. It reflects the falling prices of stone as well as significant growth in low cost natural stone hard landscaping products, granite worktops and natural stone tiles, mostly limestone or travertine. The lower prices are in no small measure due to ever more stone coming from China and India, esepcially, but also of the falling price of travertine, much of which comes from Turkey.

Both India and China have come from practically nowhere in the international trade of stone 15 years ago to being up there with Italy among the world's largest now. A major factor in that growth is the low price of their stone.

In the build up to the millennium, city, town and village rejuvenation schemes became much more likely to use natural stone for hard landscaping and the trend has continued since then, helped by the falling prices of granite and sandstone hard landscaping products that no longer appear to be such an expensive alternative to concrete or clay. Perhaps the fact that low cost imported stone is available from familiar as well as new sources (many British quarries, for example, have introduced imported ranges) has also helped.

Imports of setts, kerbs and flagstones rose by 104% by volume in 2004 and 74% by value as customers moved away from the recently popular source of such materials, Portugal (volumes down 21%), to India (up 188%) and China (up 210%). It cannot be coincidental that Portugal's mean price per tonne for these products was £189 while China's was £119 and India's £110. And the prices from China and India both fell in 2004, while Portugal's increased.

An area of burgeoning growth for imports has been granite for worktops, helped both by fashion and, again, the falling price of granite. However, the prices of granite started falling before India and China had made much impression on the market because of vast improvements in the machinery and diamond tooling to work this hard material. Those developments brought down the cost of processing granite.

But the price of imported polished granite is continuing to fall (value of imports in 2004 up 11%, volumes up 21%). Here, though, a significant factor in the fall of the price was Italy, where the value of imports to the UK fell to £628 a tonne in 2004, more in line with prices from India (£614/tonne) and China (£541/tonne), a fall that is not totally unrelated to the fact that Italy is buying a lot of stone from China and India to process and sell on to the rest of the world.

In general, the price of all imported stone is falling, with the value of imports in all five groups represented on the graphs shown in the PDF of pages that can be downloaded below, growing more slowly than the volume of imports. While that continues, demand for imported stone products might reasonably be expected to continue to grow.

The UK producers, especially the northern sandstone quarriers, received a boost from all those Lottery funded Millennium Projects as the previous century came to an end. City, town and village regeneration schemes consumed a lot of stone. Since then, stone has remained popular for such schemes, although, as noted, the stone used is increasingly likely to be imported.

A resumption of activity in commercial building construction, in particular, in the past eight years has helped UK quarriers, especially where planning authorities want to see materials used that match the materials of existing buildings. This consideration has helped the UK's limestone and sandstone producers.

Planners also like to see vernacular traditions of stone housebuilding continuing in areas such as the Cotswolds, the Peak District and Yorkshire, which have long traditions of building in stone. The concrete alternatives to stone (sometimes called reconstituted stone) that were used in the 1960s and '70s have not weathered well and planners now often insist on natural stone being used for house and garden walls. Concrete 'stone' is more widely still being used for roofs in spite of both indigenous and imported natural stone alternatives being available.

That local stones are more often being required as a condition of planning permission has, again, helped British limestone and sandstone quarriers, not to mention the suppliers of saws, croppers, tumblers and other machinery used for processing the stone.

Production and use of indigenous stone in the UK is even harder to measure than imports because there are many small firms among the 200 quarry operators that produce stone from 300 active and intermittently active quarries in the British Isles.

The figures produced in the Symonds report are generally considered by operating companies to be an accurate reflection of the volumes of stone produced in Britain, many of the larger companies having co-operated with Symonds in preparing the report for the Office of the Deputy Prime Minister.

The figures from 1992 to 2001 presented in the report are reproduced on the 'UK Production' graph on the downloadable PDF pages below. Official figures collected since then are incomplete. And they have only ever included figures for volumes as the dimensional stone industry is considered so small as to make values commercially sensitive.

While imports continue to satisfy a burgeoning demand for stone interiors in commercial and domestic properties, especially granite worktops, marble bathrooms, stone-tiled wetrooms and limestone floors, British stone is still finding an eager audience. It is used for cladding new builds, for flooring, wall linings, receptions, landscaping and housing. It is worked on the banker into fine masonry and carvings and is always in demand for sensitive conservation work on the country's finest buildings.

*Planning for the Supply of Natural Building and Roofing Stone in England and Wales, ISBN 1 85112 691 0, price £25 from ODPM Publications. Tel: 0870 1226 236.

Click here for PDF of this report with graphs.