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Construction sales increase despite uncertain future

Manufacturers of construction products are confident that sales will continue to grow in the third quarter of 2010, according to the latest Construction Activity Barometer from Ernst and Young and the Construction Products Association.

Construction sales increase despite uncertain future

The second quarter saw construction product sales increase significantly, recording 77 on the Barometer. (50 is the tipping point between no change in sales compared to a year earlier and a fall in sales).

However, 12 months ago sales were at an historic low so the rise is from a very low base.

Heavy side manufacturers rose to 79 in the second quarter, the highest level since the second quarter of 2007, while light side manufacturers were also positive with a score of 66.

Looking ahead, the majority of construction products manufacturers expect their sales to continue to rise in the third quarter, compared with the same quarter one year earlier.

Noble Francis, Economics Director for the Construction Products Association said; ‘This latest survey illustrates that the situation for the construction products industry is substantially better than it was one year ago but, with major public spending cuts looming, manufacturers fear that sales will fall sharply once again. With government capital expenditure set to be cut by £100 billion over the next five years there is a real danger that any recovery in the construction industry will be delayed. This would seriously impact upon manufacturers and suppliers of construction products, holding back a return to growth in the wider economy.’

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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