Construction product sales up in second quarter

Sales rose for ninth consecutive quarter and optimism widespread for next 12 months

THE Construction Products Association’s latest State of Trade Survey for the second quarter (Q2) of 2015 indicates that construction product manufacturers’ sales increased for a ninth consecutive quarter, largely driven by growth in all key areas of the UK construction market.

Among the key points revealed about the heavy side of the sector:

• A balance of 78% of heavy-side firms reported that sales rose during Q2, compared with a year earlier
• 78% of heavy-side product manufacturers reported that they anticipate a rise in sales over the coming year
• 33% of heavy-side firms reported capacity utilization of more than 90% during Q2, and 28% reported operating at more than 90% capacity over the last 12 months
• 89% of heavy-side firms increased employment in the year to Q2
• 72% of heavy-side firms anticipate increasing investment in plant and equipment over the next 12 months.

CPA economist Rebecca Larkin said: ‘The construction recovery has broadened beyond private house building to the commercial, industrial and infrastructure sectors, which has increased demand for construction products and led to a sustained period of growth among manufacturers.

‘The increase in demand has seen production increase and manufacturers have begun to absorb spare capacity, particularly on the heavy side where a third of firms reported operating at more than 90% capacity in the second quarter.

‘Reinforcing optimism over the outlook and indicating that manufacturers anticipate a sustained increase in production, two-thirds of heavy-side firms reported that investment in plant and equipment increased in second quarter, compared with a year earlier, and cited this as the primary area of investment for the next 12 months.’