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CPA reports rebound in third quarter

Mortar

More than half of all construction product manufacturers expect recovery to intensify in fourth quarter

FOLLOWING the easing of COVID-19 (coronavirus) lockdown restrictions and the subsequent reopening of construction sites and supply chains, construction product manufacturers have reported a rebound in the third quarter of 2020 (Q3), pointing to early signs of a V-shaped recovery.

The Construction Products Association’s State of Trade Survey for 2020 Q3 reveals that 33% of heavy-side manufacturers reported a rise in sales compared with the second quarter, with 56% of all firms expecting the recovery to intensify in the fourth quarter.

However, looking further ahead, 24% of heavy-side manufacturers are anticipating a fall in sales over the next 12 months, with 6% expecting to reduce investment in structures and 24% expecting to reduce investment in plant and equipment, although 65% anticipate increased investment in e-business over the next year.

Rebecca Larkin, senior economist at the CPA, said: ‘Despite the welcome news of a pick-up in activity, the Q3 survey captures the uncertainty over the recovery path for the economy and construction next year.

‘There are already clear signs of differences in the outlook by sector, with house building subject to volatility as the stamp duty holiday ends and employment backdrop worsens, infrastructure benefiting from new and ongoing major projects, and commercial facing near-term unknowns over demand for office and retail space depending on how embedded homeworking becomes in future.

‘The uncertainty is proving to be a catalyst for manufacturers to prepare for how new ways of working may change supply chain distribution, notably through increasing investment in developing e-commerce.’

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