The Construction Product Association’s latest State of Trade Survey reports continued growth in sales of construction products in the third quarter of 2016. Sales increased for a fourteenth consecutive quarter, and in the first survey after the EU referendum, manufacturers moved from a pessimistic stance to an optimistic one regarding near-term prospects.
Rebecca Larkin, CPA senior economist, said: “Construction product manufacturers reported an increase in sales during Q3, suggesting that construction activity remained resilient following initial uncertainty in the run-up to, and immediately after, the EU referendum in June.
“A balance of 26% of heavy side firms reported a quarter-on-quarter rise in sales in Q3, although this was lower than the balance of 52% recorded in Q2. Quarterly sales rose according to half of manufacturers on the light side, which was the highest balance since 2015 Q1 and an increase from 38% in Q2.
“In contrast to pre-referendum pessimism evident in manufacturers’ forward-looking views in last quarter’s survey, expectations for near-term sales turned markedly higher in Q3. On balance, 45% of heavy side firms and 67% of those on the light side anticipated rising sales over the next three months and this optimism extends for performance over the next 12 months.
“Interestingly, the sharp depreciation in Sterling does not appear to have translated into an increase in export sales in our sector. Instead, the effect of the weak currency has been manifested in rising costs for imported raw materials and higher fuel bills, adding to the existing inflationary pressures on wages created by skills shortages. Nevertheless, manufacturers anticipated a pickup in overseas sales over the next 12 months.”
