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[March 2003]
UK Building Product Manufacturers Remain Optimistic
Although poor weather contributed to a subdued finish to 2002, the Construction Products Association's latest Trade Survey shows that members remain optimistic about the year ahead. The prospects for the industry are, however, critically dependent on the delivery of promised increases in Government investment in the UK infrastructure and built environment, particularly in view of the expected slowdown in private sector activity due to the current uncertain economic and political climate.Commenting on the survey, CPA Economics Director Allan Wilén said: "2002 was a good year for manufacturers and suppliers with an estimated volume increase of between 3% and 4% on average across the construction products industry. This compares with an 8% rise recorded by DTI in construction output as a whole.
"The impact of the global slowdown on overseas trade, introduction of the aggregates tax, and changes in the construction workload mix have all conspired to moderate sales growth over the last year, whilst a widening in house builders' margins, due to the sharp rise in house prices, has added to the increase in construction output volumes.
"Looking ahead, the industry anticipates further sales growth in 2003. Indeed a quarter of firms are anticipating an increase of more than 5% in their first quarter sales compared to a year ago, with almost 38% signalling a rise of more than 5% over the full year. On exports, companies are hopeful that the corner has been turned with on balance a fifth of all firms expecting to increase their export sales over the coming year.
"Turning to investment, the industry's continued optimism is supported by a consistent increase in capital expenditure in almost all areas and this reflects manufacturers' positive, if cautious, outlook for construction activity, which is combined with a determination to further enhance productivity."
ENDS