MPA survey indicate further decline in UK construction activity

Survey results by the Mineral Products Association (MPA) results for the first quarter of 2013 confirm the slow start to UK construction activity in 2013 and it has expresed the urgent need for accelerated delivery of promised funding and projects. However, while construction output is expected to decline again this year, the Construction Products Association has forecast a recovery in 2014 and beyond.

Compared with the first quarter of 2012, MPA data released Friday shows sales of construction aggregates (crushed rock and sand and gravel) fell by seven per cent, ready-mixed concrete by four per cent and asphalt by 18 per cent. Sales of cement are likely to reflect a similar picture to concrete, the MPA said.

Commenting on the results, Nigel Jackson, Chief Executive MPA, said: “The disappointing first quarter MPA results reflect the reality that construction activity remains very depressed following the eight per cent decline in construction during 2012. 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 deadweight holding back economic recovery.” 

Construction output to decline this year, recovery in 2014

Construction output is set to fall by more than two per cent this year following an eight per cent contraction in 2012, according to the latest forecasts published today by the Construction Products Association. A recovery is anticipated in the medium-term with growth of 1.9% in 2014 and 3.8% in 2015.

Noble Francis, Economics Director of the Construction Products Association, commented: “The industry lost GBP9bn of activity last year and these latest forecasts anticipate a further GBP2bn loss in 2013. This fall is primarily due to the lack of private sector investment and the continuing bite of public sector spending cuts. Conditions were exacerbated by poor weather during the first quarter.

"Of most concern is the fall in output in private commercial, the largest construction sector, which fell 10 per cent last year and is estimated to fall a further seven per cent in 2013.

 “Despite this, we are already encouraged by signs of improved market activity, primarily driven by private housing and infrastructure. We anticipate that government policies such as Help to Buy will boost private housing, which is expected to rise 19 per cent in just two years. Infrastructure activity is set for seven per cent growth in 2013, boosted primarily by rail construction such as Crossrail, Europe’s largest project, and station refurbishments around the country.