The Construction Products Association’s latest State of Trade Survey – covering the second quarter of 2015 – indicates construction product manufacturers’ sales increased for a ninth consecutive quarter, driven by growth in all key areas of the UK construction market, together with a rise in export demand.
Key points include:
- A balance of 78% of heavyside firms and 73% of lightside firms reported that sales rose during the second quarter of 2015, compared to a year earlier;
- 78% of heavyside product manufacturers and 50% of lightside product manufacturers reported that they anticipate a rise in sales over the coming year;
- Exports increased for 20% of heavyside firms and 40% of lightside firms with 23% of heavy side firms and 38% of light side firms anticipating a rise in exports over the next year;
- 33% of heavyside firms reported capacity utilisation of over 90% during Q2. Furthermore, 28% of heavyside firms and 15% of lightside firms reported operating at over 90% capacity over the last 12 months;
- 89% of heavyside firms and 47% of lightside firms increased employment in the year to Q2;
- 72% of heavyside firms and 50% of lightside firms anticipate increasing investment in plant and equipment over the next 12 months.
CPA economist, Rebecca Larkin, said: “The construction recovery has broadened beyond private house building to the commercial, industrial and infrastructure sectors, which has increased demand for construction products and led to a sustained period of growth among manufacturers. 78% of heavyside firms and 73% of lightside firms reported a rise in sales in Q2 compared to a year earlier. In contrast to Q1, which saw a decline in export sales, domestic strength was also boosted by an increase in sales to overseas markets.
“Reinforcing optimism over the outlook and indicating that manufacturers anticipate a sustained increase in production, two-thirds of heavyside firms reported that investment in plant and equipment increased in Q2 compared to a year earlier and was cited as the primary area of investment for the next 12 months.”
Rebecca continued: “The increase in demand has seen production increase and manufacturers have begun to absorb spare capacity, particularly on the heavyside, where a third of firms reported operating at over 90% capacity in Q2. In turn, increased capacity utilisation has been reflected in manufacturers reporting higher costs.
“Wages and salaries were reported to be higher for 100% of firms on the heavyside and 93% on the lightside in Q2, but firms have increased hiring despite the upside pressure on wage bills. 89% of heavyside manufacturers and 47% of those on the lightside also increased headcount in Q2.”
