MPA figures show comparative improvement in markets
First-quarter growth in aggregates and concrete sales volumes increases doubts over government data
AGGREGATES and cement markets showed comparative improvement in the first quarter of 2011 but strong concerns remain for the next 18 months, according to the Mineral Products Association (MPA). The Association says its latest figures also highlight doubts about official construction and GDP data.
The MPA’s latest quarterly survey of construction material trends reveals that aggregates, cement, concrete and asphalt sales volumes all grew in the first quarter, compared both with the same period of 2010 and also with the final quarter of last year.
Aggregates sales volumes in total were 6% up in the first quarter of 2011, compared with the first quarter of 2010, with growth evident in sand and gravel rather than crushed rock sales, while cement, ready-mixed concrete and asphalt sales were 16%, 19% and 10% up respectively.
According to the MPA, the improvement was due to a shifting of sales from the poor weather-affected final quarter of 2010, and improved demand in some areas, including concrete in London and the South East and asphalt sales – reflecting road maintenance work in response to the deteriorating road conditions.
The Association’s chief economist, Jerry McLaughlin, commented: ‘The first quarter was stronger than we expected, which is partly due to some underlying improvements in construction activity, such as office development in Central London, and partly due to a catch up from the weather-affected end of 2010. In overall terms market performance has been relatively flat over the past six months and we do not expect sustained growth until 2013.
He added: ‘We would not expect the first-quarter growth trend to be sustained throughout the year because we have yet to see the full impact of the planned cuts in public investment. We are particularly concerned about the lack of funding to repair our local road network, in spite of the £200 million of emergency funding announced this year, and the prospects for recovery in commercial and housing markets outside the South East are patchy at best.’
One feature of the MPA’s first-quarter survey results and other construction indicators is the disparity between this data and government’s published figures for construction output. Recent government figures indicated 0.5% GDP growth in the first quarter, compared with the final quarter of 2010, which included a 4.7% reduction in construction.
According to the MPA, this reported 4.7% decline in construction looks at odds with data on MPA members’ products used extensively throughout the construction industry. For example, aggregates sales volumes in the first quarter were 6% higher than the fourth quarter of 2010 and ready-mixed concrete sales volumes were 20% higher.
‘While we would not expect a precise correlation between our data and construction output figures, we think that there is sufficient evidence to suggest that the official figures underestimate both the decline in construction activity in the final quarter of 2010 and the recovery of work in the first quarter of 2011,’ said Mr McLaughlin.
‘This is an issue of wider significance because if, for example, construction output actually grew rather than fell by 4.7% in the first quarter, the GDP growth would have been a much more positive 1.1%.’
AGGREGATES and cement markets showed comparative improvement in the first quarter of 2011 but strong concerns remain for the next 18 months, according to the Mineral Products Association (MPA). The Association says its latest figures also highlight doubts about official construction and GDP data.
The MPA’s latest quarterly survey of construction material trends reveals that aggregates, cement, concrete and asphalt sales volumes all grew in the first quarter, compared both with the same period of 2010 and also with the final quarter of last year.
Aggregates sales volumes in total were 6% up in the first quarter of 2011, compared with the first quarter of 2010, with growth evident in sand and gravel rather than crushed rock sales, while cement, ready-mixed concrete and asphalt sales were 16%, 19% and 10% up respectively.
According to the MPA, the improvement was due to a shifting of sales from the poor weather-affected final quarter of 2010, and improved demand in some areas, including concrete in London and the South East and asphalt sales – reflecting road maintenance work in response to the deteriorating road conditions.
The Association’s chief economist, Jerry McLaughlin, commented: ‘The first quarter was stronger than we expected, which is partly due to some underlying improvements in construction activity, such as office development in Central London, and partly due to a catch up from the weather-affected end of 2010. In overall terms market performance has been relatively flat over the past six months and we do not expect sustained growth until 2013.
He added: ‘We would not expect the first-quarter growth trend to be sustained throughout the year because we have yet to see the full impact of the planned cuts in public investment. We are particularly concerned about the lack of funding to repair our local road network, in spite of the £200 million of emergency funding announced this year, and the prospects for recovery in commercial and housing markets outside the South East are patchy at best.’
One feature of the MPA’s first-quarter survey results and other construction indicators is the disparity between this data and government’s published figures for construction output. Recent government figures indicated 0.5% GDP growth in the first quarter, compared with the final quarter of 2010, which included a 4.7% reduction in construction.
According to the MPA, this reported 4.7% decline in construction looks at odds with data on MPA members’ products used extensively throughout the construction industry. For example, aggregates sales volumes in the first quarter were 6% higher than the fourth quarter of 2010 and ready-mixed concrete sales volumes were 20% higher.
‘While we would not expect a precise correlation between our data and construction output figures, we think that there is sufficient evidence to suggest that the official figures underestimate both the decline in construction activity in the final quarter of 2010 and the recovery of work in the first quarter of 2011,’ said Mr McLaughlin.
‘This is an issue of wider significance because if, for example, construction output actually grew rather than fell by 4.7% in the first quarter, the GDP growth would have been a much more positive 1.1%.’
