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Construction Products Association releases Construction Trade Survey

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World Cement,

The construction industry continued to display signs of weakness in 2Q19, according to the results of a survey of the supply chain’s product manufacturers, contractors, civil engineers, and SME builders by the Construction Products Association (CPA).

The Construction Trade Survey for 2Q19 shows that, during the quarter, growth in the sales of construction products was reported by 20% of heavy side manufacturers and only 9% of light side manufacturers. Similarly, it was only 5% of civil engineering contractors and 4% of SME builders that reported an increase in workloads during the quarter. In addition, hiring fell among SMEs and was the lowest in six years for product manufacturers. Growth was reported in orders, enquiries, and anticipated sales, however, raising hopes that the supply chain’s near-term outlook is positive.

“Forward-looking indicators in this quarter’s survey show that, on the surface, the construction industry has retained some of its optimism as we approach another possible Brexit date,” said Rebecca Larkin, Senior Economist at the CPA. “Underneath this, however, there appear to be clear question marks over confidence, with hiring at its lowest level in six years among manufacturers and SMEs, and a continued grappling with the rising costs of raw materials and wage bills.”

“Years of Brexit uncertainty have resulted in construction bosses starting to change how they employ their workforce,” said Brian Berry, Chief Executive of the Federation of Master Builders. “To ensure their firms are ready for any economic shockwaves later this year, employers are reducing their number of direct employees and relying more on sub-contractors who are easier to shed if work dries up. The construction industry has always used a significant proportion of subbies, but the fact that direct employment is decreasing points to Brexit nerves among construction bosses. This is the reality on the ground of what happens when years of uncertainty are inflicted on the construction industry. Furthermore, apprenticeship training has taken a hit as construction bosses are reluctant to take on young people when they cannot be sure of future projects going ahead.”

“We welcome the fact that the market bounced back in 2Q19 after a couple of disappointing quarters,” said Alasdair Reisner, Chief Executive of the Civil Engineering Contractors Association. “However, the infrastructure market remains fragile. There is nowhere near the level of growth we would expect from projected levels of investment, at a time when the UK should be redoubling its efforts to deliver strong economic growth ahead of Brexit.”

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