Construction Survey Optimism Despite Demand Sustainability Concerns
Thursday, 26 May 2011
The Construction Products Association, representing 85% by value of all manufacturers and suppliers of construction products in the UK, has published its first State of Trade Survey of 2011. The report confirms a slim improvement for manufacturers on both heavy and light construction products in 2011 Q1. However, anxiety remains about the sustainability of demand. Highlights from the report follow.
Mild and dry weather, restocking and a good exchange rate helped a rise for construction products manufactures in 2011 Q1. There is still concern for continuous growth due to inflation and cuts to the public sector. 50% of heavy and light construction products manufacturers reported that raw material prices rose by more than 5% between 2011 Q1 and the same quarter last year. Fuel cost was reported to be strongly soaring on the same period.
Sales prospects for both heavy and light side products over the next year have improved and a brighter labour climate was registered as manufacturers started recruiting for first time since 2007 with prospects of growth throughout 2011.
The report states a boost in sales on exported goods due to the lower value of pound and an improvement of prospects. However, it is noted that of the manufacturers that do export, the majority only export a relatively small proportion of their goods.
Official figures from the ONS state that construction output decreased by 4.7% in the first quarter of 2011, which clashes with the slight improvement shown in the survey. However the survey states that, although 80% of construction products manufacturers still fear about sustainability of demand, 54% of heavy side firms and 46% of light side firms expect sales to increase over the next 12 months as exports continue to rise.
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