CPA reports 14th quarter of growth
The Construction Product Association has reported continued growth in sales of construction products in the third quarter of 2016.
The latest State of Trade Survey has revealed that sales increased for a fourteenth consecutive quarter, and in the first survey after the EU referendum, manufacturers are said to have moved from a pessimistic stance to an optimistic one regarding near-term prospects.
A balance of 26% of heavy side firms and 50% of light side firms reported that construction product sales rose in the third quarter of 2016 compared with Q2, and on an annual basis sales rose for 68% of heavy side firms and 60% of firms on the light side, on balance.
Looking forward, 45% of heavy side manufacturers anticipated a rise in sales in Q4, improving from a balance of -13% in Q2, while 67% of light side firms expected an increase in product sales in the next quarter, compared to a zero balance in Q2.
Commenting on the report, Rebecca Larkin, senior economist at the Construction Products Association, said: “Construction product manufacturers reported an increase in sales during Q3, suggesting that construction activity remained resilient following initial uncertainty in the run-up to, and immediately after, the EU referendum in June.
“In contrast to pre-referendum pessimism evident in manufacturers’ forward-looking views in last quarter’s survey, expectations for near-term sales turned markedly higher in Q3.”
With regards to the impact of the fall in value of the Sterling, Ms Larkin says that the sharp depreciation doesn’t appear to have had a notable impact on export sales.
She commented: “Instead, the effect of the weak currency has been manifested in rising costs for imported raw materials and higher fuel bills, adding to the existing inflationary pressures on wages created by skills shortages. Nevertheless, manufacturers anticipated a pickup in overseas sales over the next 12 months.”