U.S. Brick Sales Remain Steady in 2001; Near-Term Outlook is Uncertain

The strong U.S. housing market helped bolster North American sales in 2001. Photo courtesy of General Shale Brick.
Strong U.S. and Canadian housing markets helped bolster North American brick sales in 2001 despite depressed economic conditions. According to Austria-based Weinerberger Baustoffindustrie Aktienges, the parent company of General Shale Products Corp., sales in the U.S. remained nearly unchanged in 2001 compared to 2000 levels. While the company saw a decline of 9% in volume sales, this was offset by price increases of roughly 5% and a stronger dollar.

UK-based Hanson plc also saw sales remain relatively unchanged from the previous year. A slight (3.9%) decline in volume, due primarily to reductions in residential demand in North Carolina, one of the company’s key markets, was offset by a 4% increase in brick prices. The company’s other major U.S. markets for brick, Texas and Ontario, both held up well—especially Ontario, where demand outstripped supply for most of 2001.

After reporting lower U.S. brick sales in fiscal 2001 due to a softening of the market and a severe winter, Australia-based Boral Ltd. posted gains of 2.5% for the six months ending December 31, 2001, also citing flat volumes and increased selling prices. (The company’s fiscal year ends in June.)

At least one company saw an increase in sales volumes as well as pricing. Brampton Brick Ltd., one of Canada’s largest brick producers, said that shipments increased 19.4% as housing starts in the company’s major markets of Ontario and Quebec grew to 101,000 units, up 5.0% from 2000 levels. Brampton’s new state-of-the-art brick production line, which came on stream late in 2000, helped the company meet the increased demand.

International markets for brick were mixed. Housing starts fell by 9% in Austria, 10% in Poland and 5% in Hungary while rising 6% in the Czech Republic. The market in Slovakia also showed modest growth in 2001. The housing market in Germany slipped from a relatively robust condition in the middle of 2000 and was depressed throughout 2001. This also affected many nearby countries, such as Belgium, the Netherlands, Sweden and Denmark, which rely heavily on exports to Germany. Demand in Israel also remained low due to the current political and economic situation there.

In Australia, the building and construction industry spiraled downward after the boom that preceded the 2000 Olympics. In the second half of 2000, construction activity dropped 26% below the peak of the cycle, which occurred in the first half of the year. However, a recovery in this sector was beginning to emerge by the end of 2001.

While most companies are optimistic about a global economic recovery in the second half of 2002, many are cautious about the outlook for the brick industry in the near term. In the U.S. and Canada, a slight decline in the housing industry is expected to occur in the second half of 2002 and early 2003 and may negatively affect volume shipments. However, long-term forecasts for population growth are favorable and should lead to increased demand for housing in the future.

A recovery in the German market is not expected in 2002, and general levels of construction activity in Israel also look set to remain relatively low. In Australia, however, volumes are expected to continue their gradual recovery during 2002, led by housing and infrastructure spending, with commercial and industrial activity likely to be more subdued.

Editor's Note

The foregoing information was compiled from publicly available information in annual reports and news releases.

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