The Construction Products Association’s (CPA) latest survey on the state of trade shows a slight improvement for construction product manufacturers in the first quarter of 2011, although it indicates that the longer-term outlook is still uncertain.
The good weather, combined with restocking and the favourable exchange rate improved operating conditions, particularly in relation to the last quarter of 2010 which was blighted by bad weather.
The CPA’s results conflict with last month’s Office for National Statistics’ (ONS) figures which indicated a 0.5% rise in GDP, but a 4.7% fall in construction output for the first quarter.
The CPA expressed doubts at the time, saying that 48% of manufacturers reported that sales of construction products rose in Q1, compared to just 14% in Q4 of 2010.
“The scale of the fall in the official figures is extremely surprising and inconsistent with the information from this survey and anecdotal evidence from the industry,” said CPA economics director Noble Francis.
He added, however, that the outlook was uncertain. “Given that we are yet to see the full effect of the public spending cuts, in the near term we do not expect that private sector construction will be sufficiently strong to compensate for these cuts,” he said. “As a result the association’s latest construction forecasts anticipate that output in the industry will fall in 2011 and 2012 before it sees any significant growth in 2013.”
