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UK mineral product sales rise

February 9, 2017

Higher mineral products demand in Britain through 2016, particularly in the last quarter, indicates "momentum in construction activity" at the start of 2017, according to the Mineral Products Association.

Mineral products are by far the largest element of the construction supply chain and the association's  latest sector results provide a contrasting view to more subdued official construction statistics.

Sales volumes of ready-mixed concrete in Great Britain improved by 4% compared to 2015, matched by a 4.2% increase for aggregates, and 4.6% increase for mortar. Asphalt sales remained broadly flat compared to 2015 (+0.1%).

On a quarterly basis, sales volumes for these materials in Q4 2016 were also positive, and improved compared to the weaker markets observed over the summer. Sales of ready-mixed concrete and aggregates grew by about 1.5% in the final quarter of 2016 compared to the previous quarter, and 2.4% for asphalt. Materials such as ready-mixed concrete and aggregates are used across all major construction sectors, particularly in the earlier stages of projects, and therefore provide hard evidence of sustained activity on the ground. In addition, mortar sales, underpinned by strong housebuilding activity, increased by 4.3% over the same period.

Despite the positive volumes evident since the EU Referendum, the regional picture is more mixed, and lower demand in Wales in particular indicates, the association says, declining construction activity there in 2016. While the GB asphalt market was flat in 2016, sales volumes in England dropped by 1.7% for the year and, the association argues, confirmed industry concerns about lower and slower Highways England spending on renewals work and constrained local authority budgets.

Aurelie Delannoy, chief economist, Mineral Proeducts Aassociation, said: “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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