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[May 2003]
Construction Product Manufacturers Enjoy Firm Start to 2003
The UK Construction Product Association's latest Trade Survey reveals a
buoyant construction products industry, with almost two-thirds of surveyed
companies reporting sales up on the preceding quarter and reporting volumes
rising by over 5%.Commenting on the survey, Economics Director Allan Wilén said:
"Construction product manufacturers have enjoyed a pick-up in sales since
the New Year as contractors make up for ground lost to poor weather during
the closing months of 2002. Despite the recovery, however, sales volumes
failed to match those of the first quarter of 2002, especially for heavy
side firms, many of which saw their sales temporarily boosted a year ago by
advance sales ahead of the Aggregates Tax."There is also continuing optimism as manufacturers anticipate sustained
growth over the next twelve months, with 30% of firms expecting sales to
increase by more than 5%. On a cautionary note, with private sector demand
forecast to cool, growth will be crucially dependent upon the timely
delivery of the Government's investment plans."Furthermore, cost pressures have intensified with an increased tax burden
adding to rising labour, fuel and raw material costs. On balance 59% of
firms have seen their unit costs rise over the last year, with almost a
quarter reporting increases of over 5%. Firms now have to contend with the
rise in national insurance rates, a factor that will not help the industry's
competitiveness against overseas suppliers."Encouragingly, and in contrast to many other parts of UK manufacturing, the
response in our industry has been to increase capital expenditure, both to
contain unit costs and to accommodate the anticipated rise in public sector
funded construction activity. Product improvement and customer research
remain priority areas over the next year, although a growing proportion of
firms intend to spend more on plant and equipment in a move that can only
improve productivity."
ENDS