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Optimism increases as construction product sales grow

Construction product manufacturers reported an increase in sales of products for the fifth consecutive quarter, according to the Construction Products Association’s latest State of Trade Survey.
The CPA survey reports that 100% of construction product manufacturing firms, on balance, reported a rise in sales in Q2 compared with the previous year.

In addition, 83% of product manufacturers reported that they anticipate sales rising over the coming year.

For the first time in five years, product manufacturers reported increases in levels of capital investment across all areas of their business.

Following on from Q1, both heavy side and light side firms reported increasing cost pressures stemming from wages and salaries. Whereas lack of demand remains a key concern for light side manufacturers, data from heavy side firms suggests that capacity pressures may be emerging.

Kallum Pickering, senior economist at the CPA, said: “These results confirm that the construction products industry is firmly on the path of recovery. All firms reported that sales increased compared with the second quarter of last year and, looking forward, no firms expect sales to fall over the coming year. These findings fall in line with the recent broadening of growth across private construction.

“There are clear signals that firms are looking to capitalise on the positive growth outlook. Both heavy side and light side firms reported that capital investment increased across all areas of business and, investment intentions over the next 12 months were equally positive.

“Product manufacturers increased headcount for a fourth consecutive quarter, and whilst this is positive news, data on cost inflation suggests that wages are beginning to make a significant contribution to rising costs of firms. 95% of heavy side firms and 80% of light side firms indicated that wages and salaries contributed to cost inflation in Q2”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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