Mineral products sales subdued in second quarter

But MPA says prospects for construction output and mineral products demand remain positive

SALES volumes of aggregates and ready-mixed concrete were 4% higher, and asphalt 10% higher, in the second quarter of 2015 compared with the same quarter of 2014, according to the latest figures from the Mineral Products Association (MPA).

For the half year to June, sales were also positive in comparison with the same period in 2014, with aggregates and concrete 7% higher and asphalt sales 10% higher.

However, the MPA says there are indications that construction markets may have slowed down temporarily, with seasonally adjusted data for the second quarter of 2015 (which strip out the effect of seasonal factors such as weather variations and public holidays) indicating lower underlying sales compared with the first quarter.

On this seasonally adjusted basis, second-quarter asphalt and concrete sales were broadly flat (+0.3% and –0.7% respectively) and aggregates sales declined (crushed rock –3.7% and sand and gravel –7.2%) relative to the first quarter of the year.

The MPA says that while there may be ‘technical’ reasons contributing to the second-quarter seasonally adjusted figures, the latest GDP figures also indicate that second-quarter construction output was flat compared with the first quarter.

Anecdotal information has also suggested some flattening of demand growth, and it is possible that some markets experienced a pre-election slowdown followed by a rebound from June.

Nevertheless, expectations for construction output and mineral products demand remain positive for 2015 and the following years. Activity will be supported by further growth in housing construction, improvements in commercial and infrastructure work, including the implementation of major investment programmes, and evidence of economic activity spreading beyond London and the South East.

Nigel Jackson (pictured), chief executive of the MPA, commented: ‘Although there has been an underlying slowdown in recent construction activity, prospects are positive given the renewed government commitment to housing and infrastructure improvements, and boosting city/regional development.

‘It will be critical that the operation of the planning and regulatory systems enable the industry to meet future and growing demands, and support UK competitiveness, and it is very positive that the Government is very engaged with the MPA on these issues.’