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[February 2001]
Association calls for early cut in interest rates
In the light of the latest Construction Products Association’s less optimistic Trade Survey, and prior to next weeks meeting of the Monetary Policy Committee, President Roy Harrison has written to Sir Eddie George, Governor of the Bank of England underlining the Association’s concerns regarding monetary policy. In particular he reiterated the industry’s need for lower interest rates as soon as possible to help recover its competitiveness.
Commenting on the survey’s findings Harrison said "Whilst bad weather and rail disruption added to the industry’s problems during the fourth quarter, the poor product sales recorded by the survey during the fourth quarter of 2000, also reflect an underlying slowdown in the number of new private sector projects."
"The weak finish to 2000 appears to have tempered expectations for the current quarter. The industry remains cautiously optimistic for 2001 as a whole, but the modest growth in output anticipated during the year is dependent upon the prompt delivery of additional government investment promised under the Comprehensive Spending Review."
"Sterling’s strength, particularly against the Euro, has helped overseas suppliers to gain market share while UK exporters have often faced intense competition from Euro zone competitors. Exchange rate problems have been consistently identified in successive surveys as the key hindrance upon UK manufacturers export efforts during 2000."
Harrison added, "An early cut in interest rates would both soften the impact of slowing private sector growth and allow UK firms to begin addressing the current trade imbalance."
THE CONSTRUCTION PRODUCTS ASSOCIATION:
The Construction Products Association represents the UK’s producers and distributors of construction products, components and fittings. It was formed by the merger of the National Council of Building Material Producers and the Alliance of Construction Products Suppliers on 1 January 2000.
The Construction Products Association acts as the voice of the construction products sector representing the industry-wide view of its members. The Association is committed to demonstrating the importance of a growing, profitable and sustainable construction products sector within the UK economy.
FURTHER INFORMATION CONTACT:
Allan Wilén, Economics and Special Projects Director
Construction Products Association
Tel: 020 7323 3770
Fax: 020 7323 0307
E-mail:awilen@constprod.org.uk
ENDS