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Sales improve in the third quarter

SALES of aggregates, asphalt, cement and ready-mixed concrete all improved in the third quarter of 2010, compared with the same period of the previous year, according to the latest figures from the Mineral Products Association (MPA).

In the Association’s third-quarter report on construction material trends, aggregates, cement, ready-mixed concrete and asphalt were 3%, 9%, 6% and 9% higher, respectively, than in 2009.

However, the MPA stressed that 2009 was a historic low point and therefore any uplift must be regarded as a comparative improvement rather than a sustained recovery.

Compared with the second quarter of 2010, the Association’s latest figures also revealed that third-quarter volumes remained relatively steady.

In comparison, the Government recently published data indicating that construction output increased by 10% in the second quarter and a further 4% in the third quarter, underpinning stronger than expected GDP growth figures of 1.2% and 0.8% in the second and third quarters.

These official figures, simply stated, would appear to suggest that the level of construction output in the UK is now at an all-time high, but according to the MPA, nothing could be further from the truth. The Association says its own data, and more general feedback from the construction and materials sectors, suggest that official construction data may be overstating the real position.

Simon van der Byl, executive director of the MPA, also emphasized that both the Association’s statistics and the wider construction improvements recorded needed to be viewed in the context of likely declines in construction activity in 2011.

‘Everyone needs to take great care in interpreting construction-related data for 2010 to date,’ he said. ‘First, the figures only reflect a welcome comparative improvement, and secondly, the 21% cut in public investment set out in the Comprehensive Spending Review will mean substantial reductions in construction sectors such as health, education and roads, and will put huge pressure on local authority spending. 

‘These negative pressures are likely to outweigh what will probably be a slow and uneven recovery in housing, commercial and other private sector construction over the next two years. In the longer term, the private sector and infrastructure projects should deliver strong construction growth, but prospects for 2011 look very depressed.

‘The possibility that many construction materials sectors and construction as a whole may experience a double-dip recession during 2011 and beyond cannot be ruled out,’ warned Mr van der Byl.


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