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UK construction products sales increase in 3Q

World Cement,

The latest State of Trade Survey from the UK’s Construction Products Association (CPA) highlighted a rise in construction products sales in 3Q13. The principle drivers of growth continued to be the private housing and infrastructure sectors, although sales in other areas also improved to a greater extent than in 2Q13.

Approximately 60% of light side firms saw both y/y and q/q sales growth, and sales were up by more than 5% q/q and y/y for heavy side producers. Exports were up 27% and 25% q/q for light side and heavy side firms, respectively. In 4Q13, sales are predicted to rise by 67% for heavy side firms and by 66% for light side producers.

“The third quarter of 2013 saw sales significantly rise across the board. Exports supported the growth but even the domestic market showed signs of recovery. Heavy side products, commonly utilised early in construction projects, recorded widespread growth in sales both on an annual basis and quarter-on-quarter. Sales of light side products such as fittings and services also increased strongly after a broadly flat Q2,” said CPA Economist, Milja Keijonen.

“Looking ahead, product manufacturers are increasingly optimistic about Q4 sales growth and most are expecting higher sales over the next 12 months. The wider economic outlook has steadily become more positive, which should support recovery in construction and demand for building products,” added Keijonen.

“Altogether, the results highlight the improving state of the market; however, concerns do remain about the sustainability of the recovery with most manufacturers reporting that domestic demand could prove to be a future constraint.”

Markit/CIPS UK Construction PMI® for September also revealed some promising signs for the sector. Although at 58.9 the result was slightly lower than August’s 59.1, house building output was at its highest since November 2003.

“Construction is no longer the weakest link in the UK economy. The third quarter of 2013 ended with output growth riding high amid greater spending on infrastructure projects and resurgent house building activity. The reversal in fortunes has spanned commercial, residential and public sector construction projects. Moreover, builders are confident that a tide of new tender opportunities will continue to lift the construction sector in the months ahead, supported by improved development funding conditions and better underlying economic conditions,” commented Tim Moore, Senior Economist at Markit.

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