Small improvement in 2010 industry sales volumes, but decline in 2011 construction markets expected
- 09 March 2011
- Company & Industry News
Sales of aggregates, cement and mineral products declined sharply in the fourth quarter of 2010, largely due to the poor weather in December. For the year as a whole, aggregates sales volumes improved by 1%, cement by 3% and asphalt by 5% although ready mixed concrete sales declined by 1%.
These figures compare with the 5.1% preliminary estimate of construction growth in 2010 reported by Government on 25 January. The MPA figures support the view of Government that the fourth quarter construction decline — which contributed significantly to the recorded fall in GDP — was substantially weather related.
However, while construction was the highest comparative growth sector of the economy in 2010, there are strong indicators that construction output will fall in 2011 and be a drag on growth. In broad terms it is unlikely that there will be enough growth from private sector construction markets to make up for rapidly declining public investment. Talk of construction booming is entirely misleading — a January bounce should not be misinterpreted as indicative for the year.
Nigel Jackson, Chief Executive MPA, commented: "Industry volumes were slightly higher in 2010 but this has provided little respite because any recovery was from historically low levels of activity in 2009 and we anticipate further market decline in 2011 as construction output falls. To put this into perspective, it is likely that 2011 aggregates volumes will be the lowest recorded since 1963.
"While we are pleased that the Government recognised the importance of infrastructure investment in the Comprehensive Spending Review, we have particular concerns about the asphalt market and the relationship between inadequate funding for road improvements and visibly deteriorating road conditions. There is an urgent need to improve critical national infrastructure and we urge Government to take advantage of the ability of transport investment to stimulate economic recovery and growth."
"With the prospect of stronger private sector growth from 2012/13 and progress on major infrastructure prospects, sector demand will eventually recover - but 2011 will continue to be very tough."
Mineral Products Association Ltd
38-44 Gillingham Street
T: +44 (0) 20 7963 8000
F: +44 (0) 20 7963 8001