Construction Sector Consolidation – never as easy as it might seem – even for MMC

Consolidation is likely to accelerate in the construction sector for both positive and defensive reasons driven by the perfect storm of chronic low profit levels, particularly at Tier 1 and market fragility driven by Covid-19 and Brexit. Materials' producers rely on consistent flow of product to market. We have all seen the impact that widespread housing site closures had on brick manufacturing earlier in the year as a bellwether for the wider sector

Modern Methods of Construction will not be immune to the challenges, where consistency of manufacturing through flow has not been achieved. There are arguably too many different competing solutions and lack of interoperability to help align capacity with market. There are solid early moves at standardisation of approvals amongst MMC warranty providers; but it is early days.

Until then, expect to see the Competition and Markets Authority becoming a nudge factor that needs to be taken account of.

The Competition and Markets Authority has revealed concerns about Breedon’s planned acquisition of around 100 Cemex sites. The CMA said the £178m deal could push up prices and lower the quality of building materials.

https://www.building.co.uk/news/cma-reveals-concerns-over-breedons-acquisition-of-cemex/5107670.article?utm_content=Daily+Building++Daily+News+CID_553687477bc45c3df0bd7bd8f4446ab7&utm_term=CMA+reveals+concerns+over+Breedons+acquisition+of+Cemex