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MPA urges new government to invest in construction

THE results of the Mineral Products Association’s market analysis for the first quarter of 2010 indicate that sales volumes of crushed rock and asphalt increased by 6% and 9%, respectively, compared with the first quarter of 2009, but cement, sand and gravel and ready-mixed concrete sales all declined (by 3%, 6% and 7%).

According to the MPA, the positive figures for crushed rock and asphalt are a reflection of progress on national road schemes and work to repair local roads following the freezing weather earlier in the year, although the growth is from historically low market levels.

However, the Association says the cement and concrete trends indicate that general construction activity remains very depressed – supporting the prediction in the latest CPA construction forecast that construction output will decline by 3% this year.

Commenting on the results, MPA executive director Simon van der Byl said: ‘These results show how sensitive the construction materials and construction markets are to the outcome of the general election. We see a welcome increase in demand from road contracts due to the previous government’s accelerated investment in this area. However, these and other public construction markets face swingeing cuts if existing plans to halve public investment spending in order to finance high public debt interest payments are implemented by a new government.’

He added: ‘The most effective means of successfully managing the public sector debt is to encourage rapid economic growth, and one of the most effective engines of economic growth is construction investment – each £1.00 invested in construction generates £2.84 of economic activity.

According to Mr van der Byl, the MPA also remains extremely concerned that the localization of the planning system set out in the Conservative and Liberal Democrat manifestos has the potential to severely constrain recovery in the housing and private development markets – therefore damaging the potential for sustained economic recovery.

‘The new government has a clear choice. It can support and promote construction actively through its investment and planning policies, and therefore accelerate economic recovery, or it can choose policies which will constrain construction and economic recovery,’ he said.


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