Sales volumes accelerated in third quarter
Latest Mineral Products Association figures indicate further growth in construction activity
SALES volumes of Mineral Products Association (MPA) materials accelerated in the third quarter of 2014 compared with the previous quarter, indicating continuing growth in construction activity. Sales volumes for asphalt, ready-mixed concrete and crushed rock in the third quarter rose by 2.5–3.5% compared with the previous quarter, and by 8.5% for sand and gravel.
Crushed rock sales have been particularly strong, up 13% in the first three quarters of the year. Asphalt and sand and gravel grew by 8–9%, while ready-mixed concrete showed a more modest growth of 2% (compared with the very strong growth in 2013).
The MPA says that while there have been improvements in most regions over the past 18 months, it is apparent that general construction growth is still being driven by London and parts of the South East. For example, GB concrete volumes remain 30% below immediate pre-recession levels in 2007, in spite of 2013 and 2014 improvements, but sales in London are now 30% higher than 2007 levels.
The asphalt and crushed rock growth points to increased road construction and maintenance activity, reflecting some recovery in government spending in this area.
Provisional GDP figures indicate a 0.8% increase in construction activity in the third quarter, mostly driven by housing. Since January, the housing sector has accounted for almost 80% of the growth in construction activity, and indicators suggest further growth in the coming months.
Nigel Jackson, chief executive of the MPA, commented: ‘Our markets have continued to improve since the second quarter of 2013 and our latest results suggest that construction activity may be stronger than previous expectations. However, it is apparent that non-housing construction remains relatively sluggish and construction improvements remain variable and inconsistent outside London.
‘In spite of a number of economic concerns and political uncertainties, the outlook for the construction and mineral products industries is the most positive for six years. For this outlook to be realized, it is essential that the next government sustains the existing commitment to long-term infrastructure investment and takes a positive strategic approach to optimizing the supply of UK mineral products.’
