Sales of UK construction products increased in the second quarter of 2016, resulting in a thirteenth consecutive quarterly rise, according to the Construction Product Association’s (CPA) latest State of Trade Survey report.

Despite the rise, CPA reported that manufacturers displayed a growing pessimism about prospects for the coming year ahead, even though 75% of responses were received prior to the EU referendum, which saw the UK exit the European Union on 23 June.

Rebecca Larkin, CPA senior economist, said, “Construction product manufacturers’ sales growth strengthened in the second quarter, suggesting that construction activity remained resilient against a backdrop of growing uncertainty in the run-up to the EU referendum at the end of the quarter.

“Compared to the first quarter of 2016, a balance of 52% of heavy-side firms reported a rise in sales in the second quarter. This was the highest balance in a year and increased from 31% in the first quarter. On the light side, 38% of firms reported a rise in quarterly sales in the second quarter, up from 13% in the first quarter.”

Larkin added that, for heavy side manufacturers, sentiment was the lowest in three years and 13% of those firms anticipated a fall in sales in the third quarter.

She said that among manufacturing firms on the light side, forward-looking sales expectations was the weakest since the financial crisis, with a downturn expected for the first time in six years.

She continued, “Sterling depreciated 8.4% against the Euro in the second quarter compared to a year earlier, which may be one favourable side effect linked to the economic uncertainty pre- and post-referendum for product manufacturers that export to Europe.

“The majority (60%) of firms on both the heavy and light side anticipate an increase in overseas sales over the coming year.”

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