MPA calls for urgent focus on construction

New research highlights the critical role of the mineral products industry to the UK economy

NEW research from leading economic consultancy Capital Economics has highlighted the critical role of the minerals products industry to the UK economy. The research has found that the UK Minerals Products Industry:

• Makes a gross value-added (GVA) contribution to the UK economy of more than £4 billion per annum – greater than creative industries, such as film and video, and not far short of motor vehicles and aerospace. 
• Generates an annual turnover of £9 billion.
• Has labour productivity 2.5 times higher than the national average.
• Supplies industries with a turnover of £400 billion.
• Is the largest supplier to the £120 billion construction industry.
• Pays more than £1 billion of taxes annually.
• Employs more than 70,000 people.
• Makes significant economic contributions throughout the UK.

In a unique analysis, Capital Economics also assessed the significance of the industry by modelling the economic impact if the UK had no indigenous supply of aggregates, finding that relying on imported aggregates would have led to a £20 billion (1.5%) loss in UK GDP over a 15-year period.

Commenting on the report, Nigel Jackson, chief executive of the Mineral Products Association (MPA), said: ‘We wanted Capital Economics to carry out an independent assessment of the economic significance of our sector and have been surprised by the results.

‘Even taking account of the 30% loss of output during the recession, the mineral products industry’s gross value-added contribution indicates the critical value of the industry to construction and many other important sectors.

‘We are clearly an enabling sector and vital to the emerging UK industrial strategy.’

Mr Jackson continued: ‘The Capital Economics analysis highlights the potential contribution we can make to economic growth and employment throughout the UK if construction activity improves in response to recently announced government measures to support housing and infrastructure development. 

‘It is widely recognized that construction, and therefore the mineral products sector, can help to boost UK economy recovery, and government has a critical role to play both through financing and enabling critical construction projects to proceed. Both roles are central to our long-term growth prospects.’

Although the MPA has repeatedly urged government to minimize the cumulative tax and regulatory burden and free-up the planning system to create conditions that genuinely support investment, the Association says the recent flurry of policy changes and announcements show little sign of accelerating growth.

‘Urgent focus needs to be given to delivering more action on the ground on housing, transport and energy infrastructure, and the nationwide need for more repair and maintenance,’ said Mr Jackson.