Overall construction activty in the UK contracted for the seventh consecutive quarter in 2010 Q1, according to the latest Construction Trade Survey.
With pressure on raw materials prices continuing to strengthen, the industry expects operating conditions to deteriorate further as 2010 progresses.
A negative balance of 24% of construction product manufacturers and suppliers saw a fall in sales compared with a year earlier. 75% of heavyside firms reported lower sales volumes, not helped by the bad weather at the start of the year, while lightside manufacturers saw an improvement in trading conditions as firms started to re-stock.
Looking forward, the survey showed something of an improvement in manufacturers’ optimism about future short-term trading conditions, but 50% of firms still expect sales to decline in Q2, slightly more than the 45% than expect to see improvement.
CPA chief executive, Michael Ankers said: “It is going to take some time to come to terms with the way the new government will work and how stable the relationships that are being established are. This uncertainty could delay the investment decisions in both the public and private sectors, and prolong the construction recession beyond 2010.
“Manufacturers and suppliers need confidence that the recovery in the housing market will continue and clarity about public sector spending programmes going forward. Without this, future investment decisions by companies in the industry will inevitably be put on hold.”
Key survey findings are: