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MPA reports more optimistic construction statistics

Published by , Assistant Editor
World Cement,

In contrast to the more subdued official construction statistics, the MPA has reported that throughout 2016, and particularly in the last quarter, the demand for mineral products was high. This indicates momentum in construction activity going into 2017, as mineral products are the largest element of the construction supply chain.

Sales volumes of ready-mixed concrete (RMC) in Great Britain improved by 4% compared to 2015. This was matched by a 4.2% increase for aggregates and a 4.6% increase for mortar. Asphalt sales were largely flat compared to 2015.

Sales volumes for these materials in 4Q16 were also positive, with improvements visible when compared to the weaker markets observed over the summer. Sales of RMC and aggregates increased by 1.5% compared to 3Q16, and 2.4% for asphalt. Mortar sales increased by 4.3% over the same time period, being underpinned by strong housebuilding activity.

Regionally, the picture is more mixed. In particular, lower demand in Wales indicated declining construction activity there in 2016. Although in GB the asphalt market remained flat, sales volumes in England dropped by 1.7% and confirmed industry concerns regarding lower and slower spending on renewals work by Highways England, as well as constrained local authority budgets.

Overall in the UK, MPA markets, construction and the general economy were more resilient during 2016 than was anticipated, but some slowdown is still expected for 2017, when the impact of the depreciation of sterling and the start of the process of leaving the EU is likely to impact on overall economic activity.

Aurelie Delannoy, Chief Economist at MPA, commented, “Our data show that construction activity remains resilient, but as inflationary pressures build up, housebuilding and construction of commercial offices and retail, the two sectors that supported activity last year, will be the most vulnerable if the risks of a general economic slowdown materialise. Meanwhile, infrastructure spending is likely to be a more positive feature of construction, but only from 2018. This raises concerns about construction activity and related mineral products sales in 2017.”

“In times of great uncertainty about the future UK economic model and our relationship with our major trading partners, building and maintaining confidence is key to investment in construction and related markets. Accelerated delivery of smaller scale infrastructure projects would send a strong signal to the industry and investors.”

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