Construction activity continues to grow, according to new figures from the Construction Products Association and the Construction Purchasing Managers Index.
The latest Construction Activity Barometer from Ernst and Young and the Construction Products Association shows an overall score for the second quarter’s overall of 77. A figure above 50 represents an improvement in sales compared to a year earlier with below 50 representing a fall.
The score for heavy side manufacturers rose to 79 in the second quarter, the highest level since the second quarter of 2007, while light side manufacturers were also positive with a score of 66.
The majority of construction products manufacturers expect their sales to continue to rise in the third quarter, compared with the same quarter one year earlier.
Noble Francis, economics director, said: “This latest survey illustrates that the situation for the construction products industry is substantially better than it was one year ago but, with major public spending cuts looming, manufacturers fear that sales will fall sharply once again.”
Meanwhile, the Markit / CIPS Construction Purchasing Managers’ Index, which uses a similar scoring system as the Construction Products Association, posted a score of 58.4, broadly in line with the previous month’s 58.5.
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But recruitment levels remained flat, as many construction companies expressed concern over the implications of public spending cuts and the VAT rise scheduled for 2011.
David Noble, chief executive officer, said: “Although the UK construction sector maintained a steady pace of growth in June, question marks loom over the sustainability of this recovery in the longer-term.
“Most tellingly, modest rises in order books did little to boost employment levels and confidence over future activity dropped. Meanwhile, curbing inflation continues to be a big issue facing firms and from our experience they are likely to be nervous about offsetting their higher costs by passing them on to clients.
“The sector is also bracing itself for another spell of troubled times following the public spending cuts and forthcoming VAT rises announced by the Government last month.”
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