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UK construction output forecast to fall in 2013

World Cement,

The Mineral Products Association (MPA) has released its sales survey results for 1Q13. The quarter saw UK sales of construction aggregates (crushed rock, sand and gravel) decline by 7%, while ready-mix concrete dropped by 4% and asphalt by 18%. The results for cement have not yet been released, but the MPA believes these will be similar to those of ready-mix concrete.

“The disappointing first quarter MPA results reflect the reality that construction activity remains very depressed following the 8% decline in construction during 2012,” commented Nigel Jackson, Chief Executive MPA. “We hope that the measures to boost housing announced in the Budget and the implementation of infrastructure funding increases from the Autumn Statement will help stimulate increased demand as the year proceeds. The key message must be about focusing on accelerating delivery and the conversion of well intentioned announcements into increased cashflow throughout the supply chain. Publicly and privately funded infrastructure projects must be delivered more quickly to back up positive policy and funding announcements. If not, the lack of construction activity will continue to be a dead weight holding back economic recovery.”

According to the latest forecast from the Construction Products Association (CPA), construction output in the UK is likely to drop by 2.1% in 2013, although 1.9% growth is predicted in 2014 and 3.8% in 2015. This year, the CPA expects rail infrastructure to increase by 14%, while private commercial output is forecast to fall by 7% and public education and health construction are both set to decline by 15%.

“Overall, 2013 is anticipated to be extremely challenging. From 2014 prospects are brighter for the industry, but the key risk is the extent to which government announcements feed through to activity on the ground,” said Noble Francis, CPA Economics Director.

Adapted from press releases by Louise Fordham.

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