UK optimism at home and for exports

By Sandy Guthrie11 February 2015

A continued growth in sales in the UK was seen by manufacturers of construction products in the fourth quarter of 2014, according to the Construction Products Association’s latest State of Trade Survey.

The association said that a further increase in sales was expected for the year ahead, and that optimism extended beyond the domestic market, with increased demand from overseas markets expected during 2015.

The survey found that 44% of heavy side firms and 87% of light side firms reported that sales had risen during the fourth quarter of 2014, with 61% of heavy side product manufacturers and 60% of light side product manufacturers reporting that they forecast sales rising over the coming year.

When comparing costs in the fourth quarter to a year earlier, 33% of firms on both the heavy and light side reported an increase. Fuel costs fell for 61% of heavy side firms and 20% of light side firms, to the lowest balance recorded in the survey.

With exports, 18% of heavy side manufacturers and 25% of light side firms reported that they rose in the fourth quarter of 2014, with 50% of heavy side firms and 70% of light side firms expecting a rise in exports during 2015.

Construction Products Association economist Rebecca Larkin said, “The latest survey results reflect the fact that the recovery in construction is broadening from private housing to commercial, industrial and infrastructure. Growth in sales of construction products was reported by both heavy side and light side manufacturers, suggesting increased activity at all stages of the building process.

She added that sales growth in the fourth quarter had been supported by favourable exchange rate conditions, which helped drive external demand from outside the Eurozone. Against this backdrop, she said, more than half of heavy and light side manufacturers expected exports would continue to rise over the next 12 months.

“In addition to rising demand, manufacturers’ optimism was no doubt boosted by receding cost pressures. The downward shift in global oil prices reduced fuel costs for the majority – 61% – of heavy side firms in the fourth quarter, the first negative balance recorded in the survey,” said Larkin.

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