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Product sales point to construction weakness in Q3

The Construction Product Association’s (CPA) State of Trade Survey for the third quarter of 2015 indicates construction product manufacturers’ sales increased for the 10th consecutive quarter. 

Growth was held back by weakness in exports, but manufacturers continued to be optimistic over prospects for the next 12 months. 

Key points included: 

  • a balance of 27% of heavy-side firms and 67% of light-side firms reported that sales rose during the third quarter of 2015, compared with a year earlier;
  • exports decreased for 18% of heavy-side firms and rose for 14% of light-side firms;
  • 64% of heavy-side product manufacturers and 79% of light-side product manufacturers reported that they anticipated a rise in total sales over the coming year;
  • 77% of heavy-side and 33% of light-side firms increased investment in plant and equipment in Q3; and
  • 53% of heavy-side and 33% of light-side firms anticipated increasing employment over the next 12 months.

CPA economist Rebecca Larkin said:  “We have now seen 10 quarters of sustained growth reported by construction product manufacturers, led by demand from the private housing, industrial and infrastructure sectors. 

“On the downside, compared with a year earlier, 27% of heavy-side firms and 67% of light-side firms reported a rise in sales in Q3.  These balances were lower than those reported in Q2 and the lowest for the heavy-side firms since Q2 2013. 

“This decline largely reflects a decrease in export sales experienced by heavy-side manufacturers as the sterling has continued to appreciate against the euro throughout late 2015; however, the fact that heavy-side product sales occur at the beginning of the building process may also foretell a slowdown in domestic construction activity.”

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