UK construction products sales strengthen

Sales of construction products in the UK continued to strengthen during the third quarter of 2013 following the recovery in the second quarter, according to the Construction Products Association.

Private housing and infrastructure remained the key drivers behind the growth, according to the Association’s State of Trade survey. In addition, 27% of light and 25% of heavy side companies reported a rise in exports quarter-on-quarter.

Construction Products Association economist Milja Keijonen said, “Exports supported the growth, but even the domestic market showed signs of recovery. Heavy side products, commonly used early in construction projects, recorded widespread growth in sales both on an annual basis and quarter-on-quarter.

"Sales of light side products such as fittings and services also increased strongly after a broadly flat second quarter.”

Half of heavy side companies surveyed reported sales growth of over 5% quarter-on-quarter and year-on-year. Trading conditions among light side producers also improved significantly, and around 60% of companies reported a rise in sales from a year ago and quarter-on-quarter.

Keijonen said conditions were set to improve further over the next three months, with 67% of heavy and 66% of light side companies surveyed reporting that they expected sales to rise in the fourth quarter.

“The wider economic outlook has steadily become more positive, which should support recovery in construction and demand for building products,” Keijonen said, adding, “We note that employment for product manufacturers is still flat, though sentiment is increasingly positive.”

However, the survey also revealed that cost inflation was widespread across the industry, with energy and transport costs driving higher unit costs.

“Altogether, the results highlight the improving state of the market. However concerns do remain about the sustainability of the recovery with most manufacturers reporting that domestic demand could prove to be a future constraint,” Keijonen said.