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Further evidence of depth of construction recession

SALES volumes of aggregates, cement, ready-mixed concrete and asphalt again fell significantly in the third quarter of 2009 compared with the same period last year, according to the latest quarterly survey of construction material trends by the Mineral Products Association (MPA).

Aggregates and cement were around 20% down in the quarter, with ready-mixed concrete and asphalt down 26% and 17% respectively. The association says these market reductions have moderated from the second quarter, reflecting the lower comparative figures in the third quarter of 2008, but confirm that markets will show significant declines in 2009.

Despite some improvement in the housing market, and evidence that some accelerated investment announced in the 2008 Pre-Budget Report is now finding its way into Highways Agency activity, construction markets in general are still operating at extremely low levels, with orders for new construction work down by 20% in the first nine months of 2009, following a 19% decline in 2008.

According to the latest forecast from the Construction Products Association, a further 2% fall in construction output is predicted in 2010 following a 15% decline in 2009 and a 1% fall in 2008. Meanwhile, the latest MPA results indicate that the two-year (2008–2009) decline in aggregates, cement and concrete sales volumes will be around 40%, while asphalt will be down more than 20%.

Simon van der Byl, director of public policy at the MPA, commented: ‘The length and severity of the economic and construction recessions means that Government must use the forthcoming Pre-Budget Report to reverse the current policy of cutting public investment by 50%.

‘Recent research commissioned by the UK Contractors Group and the CBI has confirmed that investment in construction is very effective in stimulating further economic growth and employment, and provides significant long-term social and economic benefits.

‘There are huge amounts of spare resources available in the construction industry and supply chain, and parts of our infrastructure with outstanding backlogs of work, such as highway maintenance. Now is precisely the time to get on with this type of work.’

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