MPA first quarter sales survey confirm construction ‘slow start’

The UK 2897 Mineral Products Association (MPA) survey results for the first quarter of 2013 are said to confirm the slow start to construction activity in 2013.

Compared with the first quarter of 2012 sales of construction aggregates (crushed rock and sand and gravel) fell by 7%; ready-mixed concrete by 4%, and asphalt by 18%. Sales of cement are likely to reflect a similar picture to concrete, says the MPA.

Aggregates and concrete are heavily used throughout the construction sector being the largest material supply, and the first quarter decline in sales volumes indicates that construction output is also likely to have been at a relatively low level.

First quarter construction data can be significantly impacted by adverse weather and caution is required in interpreting data, but the underlying trends for mineral product sales into construction remain significantly negative.

The very poor asphalt figures follow an 18% decline in 2012 and reflect a very sharp reduction in road maintenance and construction activity over the past 15 months.

ONS (Office of National Statistics) data indicates that road construction fell by 41% in 2012 and government announced additional funding for road maintenance and construction projects in England in the 2012 Autumn Statement.

Given the precipitous decline experienced in road markets, allied to the increasing evidence of worsening road conditions, it is essential that the allocated funding increases are turned into projects as a matter of urgency, says the MPA.

“The disappointing first quarter MPA results reflect the reality that construction activity remains very depressed following the 8% decline in construction during 2012,” says 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 focussing 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.”