UK construction product manufacturers’ sales up

05 October 2015

UK construction product manufacturers’ sales have increased for a tenth consecutive quarter, however growth was held back by a weakness in exports, according to The Construction Product Association’s State of Trade Survey for the third quarter of 2015.

Both heavy and light construction product manufacturers reported a tenth consecutive quarter of sales growth in the third quarter of 2015, according to the survey. However, on the heavy side, it appears the Pound’s strength against the Euro proved a problem for overseas sales and weakened overall performance during the quarter. Nevertheless, manufacturers on both the heavy and light side anticipated continued growth in sales over the next 12 months, reflecting the strength of the domestic market, which has been driven by the private housing, industrial and infrastructure sectors.

The survey also showed that 13% of heavy product companies and 29% of light product companies reported their sales rose during the third quarter, although quarterly balances were lower compared to 83% of heavy and 40% of light companies reporting a sales increase in the second quarter of 2015.

Another key issue was labour costs as they drove inflation, with 93% of both heavy and light companies reporting an increase in wages and salaries. 40% of heavy and a quarter of light companies reported that they were operating at over 90% capacity.

However, despite a lower quarterly balance, 64% of heavy and 79% of light manufacturers have anticipated that sales will rise over the coming year.

Rebecca Larkin, the association’s economist, said, “As firms increase production, a growing proportion of manufacturers reported operating at 90% capacity or above in Q3. In response, manufacturers reported increased investment in plant and equipment, as well as their labour force. A further increase in investment and hiring intentions for the next 12 months signals widespread confidence over the longer-term outlook.”

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