New research from economic consultancy, Capital Economics, has highlighted the critical role of the minerals products industry to the UK economy. The research has found that the UK Minerals Products Industry:
- Makes a gross value added (GVA) contribution to the UK Economy of over £4 billion pa – greater than creative industries such as film and video and not far short of the automotive and aerospace industries.
- Generates an annual turnover of £9 billion.
- Has labour productivity 2.5 times higher than the national average.
- Feeds industries that have a combined turnover of £400 billion.
- Is the largest supplier to the £120 billion UK construction industry.
- Pays over £1 billion of taxes annually.
- Employs over 70 000 people.
- Makes significant economic contributions throughout the UK.
In its analysis, the consultancy also assessed the significance of the industry by modelling the economic impact of the UK having no indigenous supply of aggregates. The findings showed that reliance on imported aggregates would have led to a loss of £20 billion for the UK’s GDP, which equates to 1.5% over a 15 year period.
Chief Executive of the Mineral Products association (MPA), Nigel Jackson, said, “We wanted Capital Economics to carry out an independent assessment of the economic significance of our sector and have been surprised by the results. Even taking account of the 30% loss of output during the recession, the industry’s GVA contribution indicates the critical value of the industry to construction and many other important sectors. We are clearly an enabling sector and vital to the emerging UK industrial strategy. This analysis highlights the potential contribution we can make to economic growth and employment throughout the UK if construction activity improves in response to recently announced Government measures to support housing and infrastructure development.”
Earlier this year, the MPA called for the UK Government to take action to boost the construction sector as it announced 2Q12 sales results for construction materials. Ready-mixed concrete sales levels had dropped by 13% y/y in the quarter, whilst asphalt sales had declined by 16%. Sales of crushed rock, and sand and gravel aggregates had fallen 10% and 15% y/y, respectively. Sales in the first half of 2012 indicated a decline for all the materials, with asphalt being the worst hit – it had witnessed a 17% y/y drop.
It has been widely recognised that construction, and therefore the mineral products sector, can help to fortify the economic recovery of the UK. Jackson reinforced the MPA’s earlier stance, concluding, “The Government has a critical role to play both through financing and enabling construction projects to proceed, and urgent focus needs to be given to delivering more action on the ground on housing, transport and energy infrastructure.”
Though a ‘Guarantees scheme’ has been put in place by the government, it is unlikely that this will create any noticeable growth for another two years. It appears that the UK mineral industry must play the same waiting game as its construction counterpart.
Adapted from press release/written by Jack Davidson.
Read the article online at: https://www.worldcement.com/europe-cis/05102012/british_mineral_products_industry_analysis_099/
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