Sharp decline in concrete and aggregates volumes in Q3
THE latest quarterly survey of construction material trends by the Quarry Products Association highlights and confirms the sharp decline in sales volumes experienced by aggregates and ready-mixed concrete producers in the third quarter of 2008.
Compared with the third quarter of 2007, sales volumes of ready-mixed concrete fell by 21%, while sand and gravel and crushed rock sales volumes declined by 17% and 15%, respectively, reflecting not just the problems in the housing market, but also a lack of new work elsewhere in construction, notably in the commercial and industrial sectors.
Although asphalt sales fared slightly better, the Association points out that the smaller fall in asphalt volumes (down 2% in the third quarter of 2008) is from a historically low level of demand, and reflects a tailing off of demand from major contracts and continuing funding shortages for local authority highways work.
According to the QPA, the accelerating decline in demand seen in the third quarter indicates that, for 2008, the rate of annual decline of aggregates and concrete volumes will be similar to the 1991 recession.
However, it says the fundamental difference in this comparison is that the early 1990s recession followed historically high volumes in the late 1980s, whereas the current market decline is from much more modest volume base.
The Association is expecting further significant declines in aggregates and concrete markets in 2009 as the downturn in construction output worsens, and says a significant decline in asphalt demand is also anticipated given the small number of major roads contracts in progress and inadequate local highways funding.
