Construction product manufacturers see growth


Sales of building products have grown, according to the latest survey examining the sector…

Good news for the construction products sector after the latest State of Trade Survey reports growth in the third quarter of 2016.

The survey, produced by the Construction Products Association (CPA), revealed sales have in fact increased for 14 consecutive quarters, with the EU referendum vote seemingly having minimal impact on the sector. This follows growth also seen in the second quarter of the year.

CPA senior economist Rebecca Larkin said: “Construction product manufacturers reported an increase in sales during Q3, suggesting that construction activity remained resilient following initial uncertainty in the run-up to, and immediately after, the EU referendum in June.”

Larkin added that the balance—the percentage reporting positively minus the percentage reporting negatively—saw changes and said there was an expectation sales will continue to grow over the next year.

She said: “A balance of 26 per cent of heavy side firms reported a quarter-on-quarter rise in sales in Q3, although this was lower than the balance of 52 per cent recorded in Q2.  Quarterly sales rose according to half of manufacturers on the light side, which was the highest balance since 2015 Q1 and an increase from 38 per cent in Q2.

“In contrast to pre-referendum pessimism evident in manufacturers’ forward-looking views in last quarter’s survey, expectations for near-term sales turned markedly higher in Q3.

“On balance, 45 per cent of heavy side firms and 67 per cent of those on the light side anticipated rising sales over the next three months and this optimism extends for performance over the next 12 months.

“Interestingly, the sharp depreciation in sterling does not appear to have translated into an increase in export sales in our sector.

“Instead, the effect of the weak currency has been manifested in rising costs for imported raw materials and higher fuel bills, adding to the existing inflationary pressures on wages created by skills shortages.

“Nevertheless, manufacturers anticipated a pickup in overseas sales over the next 12 months.”


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