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Construction activity begins to slow

MPA says mixed second quarter of 2011 highlights need for urgent investment in construction

THE Mineral Products Association’s latest survey of industry sales volumes shows a mixed picture in the second quarter of 2011. Aggregates and asphalt sales were 4% lower than the second quarter of 2010, while ready-mixed concrete and cement sales were 2% and 1% higher, respectively, than a year previously.

Taking into account the positive first quarter of 2011, the Association said markets had been stronger in the first half year than had been expected due to some growth in private sector construction in early 2011 and continuing activity in public sector construction markets.

However, the decline in aggregates (particularly crushed rock) and asphalt sales in the second quarter of 2011 indicates that the Government’s public investment cuts are now beginning to bite and central and local government spending on road maintenance and improvement is turning negative.

Revised construction output figures for the second quarter of 2011, published by the Office for National Statistics on 12 August, indicated that construction output in the second quarter was marginally higher than the first quarter (+0.5%) but lower than the second quarter of 2010 (–1.6%), largely due to declining public sector construction.

The MPA says its own data provides further indications that construction activity is likely to fall in 2011, following surprisingly high growth figures in 2010, and prospects for 2012 industry markets look negative.

‘These latest figures support growing concerns about the performance of the construction sector over the next two years,’ said Nigel Jackson, chief executive of the MPA. ‘We believe that more urgent attention must be given to: implementing policies which will encourage growth and employment, notably investment in housing, road and transport improvements and energy infrastructure; urgently reviewing the cumulative level of carbon and energy taxation; and really improving the planning system.’


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