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[August 2005]
Government Investment Sustains Construction Growth
Overall construction output in the UK continued to rise in the second quarter of 2005 but the pace of growth was weak and critically dependent upon increased Government investment, according to the Construction Industry Trade Surveys just published by the Construction Confederation and the Construction Products Association (CPA).
Commenting on the findings, Michael Ankers, Chief Executive of the CPA, said: "The construction industry is facing difficult trading conditions as a result of a weakening in private sector activity, especially in consumer and housing market related areas. The survey results underline the importance of public sector investment for both the construction industry and the wider economy.
"Manufacturers continue to battle rising unit costs driven by higher raw material and fuel costs, with around half of firms seeing their unit costs rise by over 5%. Despite increased capital investment and productivity gains, these cost pressures are feeding through to manufacturers' selling prices."
One of the survey findings was that construction product manufacturers have on balance increased their investment over the last year. Manufacturers are planning to further raise their capital expenditure over the next 12 months. Plant and equipment and product improvement are among the priority areas for targetted increased investment, with on balance 38% to 56% of firms respectively planning to invest more.
ENDS