Improving trend in UK aggregate markets

"FOLLOWING a very poor first three months, the second quarter of 2001 showed some signs of a recovery in aggregates markets, according to the latest quarterly construction material survey from the Quarry Products Association."

"Asphalt sales volumes rose by 5% in the period April to June 2001, compared with the same period last year, and compared with a 15% decline in the first quarter this year. Sales of ready-mixed concrete were stable in the second quarter following a 5% decline in the first three months."

"Sales of crushed rock aggregates remained weak, however, with a 5% decline in the second quarter, although sales of sand and gravel improved by 2% over the same period, reflecting the stronger levels of construction activity in the south and east of England."

"The QPA said the industry had been expecting a slow start to the year, but with prospects for improvement as planned investment increases in transport, infrastructure and public services begin to ‘kick in’ as the 2001/02 financial year progresses. With some uncertainty about economic prospects, the performance of these markets will be the key driver of aggregates activity for 2001."

"These findings were echoed in the Construction Products Association’s second-quarter survey, which indicated that construction product sales, though improved, remain below the levels of a year ago."

"Commenting on the findings, CPA president Roy Harrison said: ‘The latest survey has shown a welcome improvement in sales volumes from the start of the year when deliveries and work on site were disrupted by poor weather and foot and mouth disease restrictions. Nevertheless, they remain below the levels of a year ago and the survey underlines the importance of the Government’s investment plans in sustaining growth over the next three years.’"

"The CPA survey also revealed a modest rise in domestic selling prices, although manufacturers’ margins remained under pressure from rising imports. In some sectors there was a pressure to raise prices as a result of high raw material prices and increased energy costs. This is currently being exacerbated by the introduction of the Climate Change Levy, while the impending aggregates tax is expected to add pressure from next year."