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[November 2002]
Building Products Industry in UK Steps Up Productivity
In sharp contrast to other parts of UK manufacturing, construction product manufacturers are overwhelmingly committed to both increased productivity and investment, according to the latest quarterly Trade Survey by the Construction Products Association (CPA).Commenting on the findings, the CPA's Economics Director Allan Wilén said: "Manufacturers are investing in a broad range of areas from plant and equipment to e-business, with a balance of 70% planning to invest in product improvement over the next twelve months. However, productivity gains and improved competitiveness arising from this investment must not be eroded by further increases in regulator or fiscal costs; a point strongly emphasised in the Association's submission to the Chancellor in advance of his Pre-Budget Report.
"Construction product manufacturers have faced a rising tax burden over the last two years following the introduction of the Climate Change Levy and the Aggregates Tax. Our Survey shows that these added costs are undermining significant productivity improvements by the industry. Furthermore, contractors and construction clients are facing rising construction prices with almost half of heavy side firms having to increase their domestic selling prices by more than 2.5% over the last year.
"Nevertheless, the industry's confidence remains high. On balance 61% of construction product manufacturers enjoyed increased sales volumes during the third quarter and 79% anticipated further sales growth over the next year. Sustained growth over the next twelve months will increasingly rest upon the delivery of planned increases in Government funded projects as private sector activity is forecast to moderate in response to weaker UK economic growth. The timely delivery of these projects will be vital to maintaining industry confidence as well as the delivery of the Government's pledges for improving public services."
ENDS