Construction product sales grow in Q4

Published:  27 January, 2014

Construction product sales rose in Q4, according to the Construction Products Association’s (CPA) latest State of Trade Survey.

Dr Noble Francis, economics director at the CPA, said: “In previous surveys, private housing was the key driver of domestic demand. However, Q4 has seen construction growth spread to other key sectors such as private commercial – the largest construction sector – and infrastructure.

“Demand for exports picked up in the second half of 2013 and manufacturers anticipate exports rising further in 2014, primarily due to wider economic recovery in key export markets combined with the relatively low value of sterling. As a consequence, a rise in product sales during Q4 occurred for the majority of manufacturers, across both heavy and lightside products.

“Importantly, manufacturers reported that, overall, capacity is not a significant issue and is unlikely to be during 2014, despite an expected rise in demand.

“Of concern, however, is that manufacturers reported margins continuing to be severely hindered by cost rises, especially in energy and transport fuel. In addition, manufacturers also reported that labour costs and material costs rose in the fourth quarter.”

Other key findings from the survey include:

  • Sixty-seven percent of both heavy and lightside manufacturers reported that sales rose compared with the third quarter
  • Sixty-one percent of heavyside manufacturers and 67% of lightside manufacturers reported that sales rose in Q4 compared to one year earlier
  • For 2014 as a whole, 73% of heavyside manufacturers and 85% of lightside manufacturers are anticipating a rise in sales
  • Forty-five percent of heavyside manufacturers and 58% of lightside manufacturers anticipated that exports would rise in 2014
  • Over the next 12 months, 24% of heavyside and 25% of lightside firms are anticipating that they will be operating at 90% capacity or above
  • Eighty-two percent of heavyside manufacturers and 86% of lightside manufacturers reported rises in fuel costs
  • Seventy-six percent of both heavyside and lightside manufacturers suffered from a rise in energy costs.

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