UK brick companies say their overheads have soared by 15% in the past couple of years, largely as a result of a 20-25% rise in commercial gas prices. This has added £10 to the cost of 1000 bricks.
The brick makers claim that legislation, including the climate change levy and health and safety regulations, has added to their problems.
One brick company, Wemyss, of Kirkcaldy in Fife, stopped production two weeks ago and will close in September because of the effect of the cost rises, which it has been unable to pass on to housebuilders. The 95-year-old company employed up to 80 people.
A spokesperson said: "The market has always been competitive, but when our gas costs doubled overnight it was the last straw."
Brick makers have attempted to pass on inflation-level price rises in the past two years, but these have not even begun to cover their own costs, which have gone up £20-22 per 1000 bricks. The average selling price is now £158 per 1000.
The makers say that to secure their future and that of the 9000 people employed in the UK brick industry, they will need to raise prices 7-10% in the next 12 months, although this is almost certain to be resisted by housebuilders.
There is speculation that Hanson, which makes 30% of UK bricks, may sell its brick production businesses.
One brick maker, Wemyss, stopped production two weeks ago and will close in September
Brick makers have negotiated an 80% rebate on the climate change levy, but this has still left them with a charge equivalent to £1 for every 1000 bricks.
Other cost rises have come from environmental impact assessments, compliance with regulations on packaging and waste disposal and tighter planning controls – each adding a further £1.
The Construction Products Association is lobbying the Treasury over the climate change levy. It wants manufacturers to be allowed to negotiate an 80% reduction in the levy if it implements energy reduction measures.
The campaign follows a CPA survey that revealed that the levy has added 8% to manufacturers' energy costs.
The Brick Development Association is likely to raise the impact of legislation on its members with Brian Wilson, the construction minister.
