Construction sector reports reveal optimism for second quarter7 May 2019
Latest surveys from the Construction Products Association (CPA) and Federation of Master Builders (FMB) reveal a broadly optimistic picture in the construction materials and building sector.
The CPA’s State of Trade Survey for Q1 shows continued growth in the sales of construction products and materials, while the FMB’s survey demonstrates better expectations for small and medium sized builders.
A balance of 46% of both heavy side and light side manufacturers experienced a rise in sales during Q1, according to the CPA. Growth in product manufacturers’ output is anticipated to rise further in the coming months, with 33% of heavy side firms and half of those on the light side expecting an increase in sales in Q2.
However, the political and economic situation may be holding back product manufacturers’ capital investment. Only 8% of heavy side firms, on balance, reported an annual increase in investment in structures and 17% reported investment in plant and equipment was higher than a year ago. This compares to five-year average balances of 21% and 54%, respectively.
“Recent construction data has painted a mixed picture of the demand for manufacturers’ output, particularly in sectors where confidence has been hit by Brexit-related uncertainty such as commercial offices, industrial factories and high-end residential,” said Rebecca Larkin, CPA senior economist.
“Contrast this with almost half of product manufacturers reporting increased sales in Q1 and the anecdotes of on-site stockpiling further down the supply chain seem to be ringing true.”
Meanwhile, the FMB survey shows expectations for the future have strengthened with 41% of construction SMEs forecasting higher workloads over the coming three months, up from 33% in Q4 2018.
This follows a Q1 when workloads for SME construction firms took a dip for the first time in six years. More respondents stated lower workloads (29%) in Q1 compared with the final three months of 2018 (13%).