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The Construction Products Association’s latest State of Trade Survey for the first quarter of 2015 indicates an eighth consecutive quarter of increasing sales for construction product manufacturers.  Further growth is anticipated during Q2 and over the next 12 months, supported by domestic demand, exports and a reduction in fuel and energy costs.

Construction Products Association economist, Rebecca Larkin, said:  “Product manufacturers opened 2015 with another positive quarter of sales growth, which underscores how the strength of the UK economy over the last 18 months has translated into increased activity in the construction sector.

“A rise in first quarter sales was reported by 50% of heavy side firms and 29% of light side firms, compared with the same quarter a year earlier.  Some weakness in external demand was noted, as the strong Sterling hindered exports to the Eurozone.  Nevertheless, further growth in sales is anticipated over the next 12 months by 69% of heavy side firms and 57% of those on the light side, underpinned by demand both at home and abroad.

“Developments in the global economy have benefited firms on the cost side, however.  Wages and salaries have been the key driver of cost inflation since 2014, but from the end of last year, this has been partly offset by the impact of lower oil prices, which averaged $64 per barrel in Q1.  Registering the sharpest negative balance seen in the survey, fuel prices fell for 86% of heavy side manufacturers and 83% of light side firm in the period.  Firms also reported falling energy and import costs, on balance.

“Encouragingly, product manufacturers appear keen to capitalise on this sustained period of activity and shore up demand in the longer-term.  Priority areas for investment over the next 12 months, cited by more than two-thirds of firms, were product improvement, research and development and e-business.”