Markets Improve Comparatively, but Doubts Increase over Official Data
- 27 July 2011
- Company & Industry News
Aggregates and Cement markets show comparative improvement in the first quarter but strong concerns remain for the next 18 months. MPA figures also highlight doubts about official Construction and GDP data.
Aggregates, cement, concrete and asphalt sales volumes all grew in the first quarter compared both with the same period of the previous year and also with the final quarter of 2010. Aggregates sales volumes in total were 6% up in the first quarter compared with the first quarter of 2010, with growth evident in sand and gravel rather than crushed rock sales, while cement, ready mixed concrete and asphalt sales were 16%, 19% and 10% up respectively. The improvement was due to a shifting of sales from the poor weather-affected final quarter of 2010, and improved demand in some areas, including concrete in
MPA Chief Economist, Jerry McLaughlin, commented "The first quarter was stronger than we expected, which is partly due to some underlying improvements in construction activity such as office development in
“We would not expect the first quarter growth trend to be sustained throughout the year because we have yet to see the full impact of the planned cuts in public investment. We are particularly concerned about the lack of funding to repair our local road network, in spite of the £200 million of emergency funding announced this year, and the prospects for recovery in commercial and housing markets outside the South East are patchy at best.”
One feature of the MPA first quarter results and other construction indicators is the disparity between this data and Government's published figures for construction output.
Recent Government figures indicated 0.5% GDP growth in the first quarter compared with the final quarter of 2010, which included a 4.7% reduction in construction. This reported 4.7% decline in construction in the first quarter looks at odds with data on MPA products used extensively throughout the construction industry. Aggregates sales volumes in the first quarter were 6% higher than the fourth quarter of 2010 and ready mixed concrete sales volumes 20% higher.
Jerry added, “While we would not expect a precise correlation between our data and construction output figures, we think that there is sufficient evidence to suggest that the official figures underestimate both the decline in construction activity in the final quarter of 2010 and the recovery of work in the first quarter of 2011. This is an issue of wider significance because if, for example, construction output actually grew rather than fell by 4.7% in the first quarter, the GDP growth would have been a much more positive 1.1%."
Mineral Products Association Ltd
38-44 Gillingham Street
London SW1V 1HU UK
T: +44 (0) 20 7963 8000
F: +44 (0) 20 7963 8001