MPA: sales volumes indicate further growth

An acceleration in third-quarter sales compared to the previous quarter indicated continuing growth in construction activity, according to latest figures from the Mineral Productions Association (MPA).

Statistics published yesterday by the MPA show sales volumes for asphalt, ready-mixed concrete and crushed rock in 3Q rose by 2.5-3.5 per cent compared to the previous quarter, and 8.5 per cent for sand and gravel. Crushed rock sales, it noted, have been particularly strong, up 13 per cent in the first three quarters of the year. Asphalt and sand and gravel grew by 8-9 per cent and ready-mixed concrete (RMC) showed a more modest growth of two per cent (compared with the very strong growth in 2013).

The MPA highlighted that while there have been improvements in most regions over the past 18 months, it is apparent that general construction growth is still being driven by London and parts of the southeast. For example, concrete volumes in Great Britain remain 30 per cent below immediate pre-recession levels in 2007, in spite of 2013 and 2014 improvements, but sales in London are now 30 per cent higher than 2007 levels, it said.

However, asphalt and crushed rock growth points to increased road construction and maintenance activity, reflecting some recovery in government spending in this area, the MPA added.

Provisional GDP figures indicate an increase in construction activity by 0.8 per cent in the third quarter, mostly driven by housing. Since January, the housing sector accounted for almost 80 per cent of the growth in construction activity, and indicators suggest further growth in the coming months.

Nigel Jackson, Chief Executive MPA, commented: “Our markets have continued to improve since the second quarter of 2013 and our latest results suggest that construction activity may be stronger than previous expectations. However, it is apparent that non-housing construction remains relatively sluggish and construction improvements remain variable and inconsistent outside London. In spite of a number of economic concerns and political uncertainties, the outlook for the construction and mineral products industries is the most positive for six years. For this outlook to be realised, it is essential that the next government sustains the existing commitment to long term infrastructure investment and takes a positive strategic approach to optimising the supply of UK mineral products.”