Continued growth for construction

08-07-2010

According to the latest Construction Activity Barometer from Ernst and Young, sales of construction products rose significantly during the second quarter of 2010 and manufacturers are confident that they will continue to grow once again in the third quarter.

In the Barometer a figure of 50 represents no change in sales compared to a year earlier with below 50 representing a fall in sales. The second quarter’s overall result of 77 suggests that conditions for product manufacturers are improving. However, this comparison is drawn against 12 months ago when sales were at a historic low. Heavy side manufacturers rose to 79 in the second quarter, the highest level since the second quarter of 2007, while light side manufacturers were also positive with a score of 66. Looking ahead, the majority of construction products manufacturers expect their sales to continue to rise in the third quarter, compared with the same quarter one year earlier.

Commenting on the results, Noble Francis, economics director for the Construction Products Association said: ‘This latest survey illustrates that the situation for the construction products industry is substantially better than it was one year ago but, with major public spending cuts looming, manufacturers fear that sales will fall sharply once again. With government capital expenditure set to be cut by £100 billion over the next five years there is a real danger that any recovery in the construction industry will be delayed. This would seriously impact upon manufacturers and suppliers of construction products, holding back a return to growth in the wider economy.’