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MPA concern over falling construction PMI

IHS Markit/CIPS UK Construction PMI

Latest construction PMI confirms need for faster delivery of infrastructure projects and programmes, says MPA 

THE latest construction Purchasing Managers' Index (PMI), released on 4 June, provides further evidence of weakening construction activity, following Mineral Products Association (MPA) data which indicated that sales of mineral products such as aggregates, asphalt, concrete and mortar declined in the first quarter of this year.

The MPA says the latest PMI data, showing a decline in construction output, particularly for civil engineering, illustrates the importance of accelerating the delivery of approved infrastructure plans.

In its recent Comprehensive Spending Review (CSR) submission and letter to the Chancellor, the Association stressed that UK supply chains are still hampered by the over-promising and under-delivery of infrastructure projects. It says more reliable, longer-term programmes are needed to ensure the capacities and capabilities are in place to build, improve and maintain infrastructure.

These projects are key to supporting jobs in the sector and supply chain, and jobs are now being lost due to the lack of delivery, says the MPA. The industry is also concerned that having invested in new and improved production capacity, particularly in asphalt and concrete, planned demand is not materializing.

The only positive construction and PMI data currently is for housing, but even here MPA evidence of lower mortar sales suggests that relying on new housing to drive overall construction is a risky expectation.

Jerry McLaughlin, the MPA’s executive director of economics and public affairs, said: ‘The falling construction PMIs add to concerns about construction activity highlighted in the MPA’s first-quarter data, which showed declines in all products compared with the fourth quarter of 2018.

‘Unless we see greater urgency on the delivery of planned infrastructure projects there is little prospect of construction contributing positively to GDP over the next two years. The mood music for major infrastructure projects seems to be getting less positive and there is a danger that political distractions are taking the Government’s eye off the ball.

'The MPA’s CSR submission calls for a greater focus on infrastructure project and programme delivery and the latest PMIs and other evidence of slowing construction add weight to this issue.’

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