The latest trade survey has revealed the second quarter of 2016 saw growth in sales of construction products…
According to new data from the latest trade survey there was an increase in the number of sales made in the construction products sector.
Sales reportedly rose for the thirteenth consecutive quarter, but there remains uncertainty about the year ahead from manufacturers who remain pessimistic about the prospects.
The survey revealed that 52 per cent of heavy side firms and 31 per cent of light side firms saw an increase in sales when compared to the previous quarter. Additionally, on balance annual sales rose for 57 per cent of heavy side firms, but not for light side firms.
However, heavy side manufacturers said they expect to see a fall in sales during Q3, with 13 per cent stating this would be the case. This would represent the lowest balance since Q4 2012.
Light side manufacturing recorded a zero balance for expectations in Q3, with 14 per cent expecting to see a decline in products sales over the next 12 months.
Some 60 per cent of heavy and light firms said they expect to see an increase in export sales over the next year.
Construction Products Association senior economist Rebecca Larkin said: “Construction product manufacturers’ sales growth strengthened in Q2, suggesting that construction activity remained resilient against a backdrop of growing uncertainty in the run-up to the EU referendum at the end of the quarter.
“Compared to the first quarter of 2016, a balance of 52 per cent of heavy side firms reported a rise in sales in Q2. This was the highest balance in a year and increased from 31 per cent in Q1. On the light side, 38 per cent of firms reported a rise in quarterly sales in Q2, up from 13 per cent in Q1.
“However, pessimism prevailed in manufacturers’ views for the months ahead, even with the majority of responses coming in before the existing economic uncertainty intensified following the referendum result.
“For heavy side manufacturers, sentiment was the lowest in three years and 13 per cent of those firms anticipated a fall in sales in Q3. Among manufacturing firms on the light side, forward-looking sales expectations were the weakest since the financial crisis, with a downturn anticipated for the first time in six years.
“Sterling depreciated 8.4 per cent against the Euro in Q2 compared to a year earlier, which may be one favourable side effect linked to the economic uncertainty pre- and post-referendum for product manufacturers that export to Europe.
“The majority (60 per cent) of firms on both the heavy and light side anticipate an increase in overseas sales over the coming year.”