CPA survey shows cautious next 12 months for UK construction products

18 October 2019

Construction product manufacturers are signalling a cautious view of the next 12 months, with 11% of heavy side firms anticipating a fall in sales, according to the latest Construction Products Association (CPA) survey.

This was the CPA survey’s first negative reading in the forward-looking indicator in seven years. This was combined with a subdued picture for hiring in Q3, in addition to expectations that rises in headcount over the next year will be the lowest since 2013.

The CPA s State of Trade Survey for 2019 Q3 also reported that 3% of heavy side manufacturers, on balance, reported a fall in sales compared to Q2. Sales of light side products, typically used in the later stages of construction, were reported to have increased by a balance of 54% of manufacturers.

The CPA said the construction products manufacturing sector began to feel the impacts of the broader weakness in economic growth and a diminishing pipeline of construction activity in Q3, with heavy side manufacturers reporting a fall in sales and a slowdown in hiring during the quarter.

Rebecca Larkin, CPA Senior Economist, said levels of construction work underway were currently relatively high, benefiting light side product manufacturers feeding into large-scale city centre regeneration underway, particularly in Birmingham and Manchester.

But she said a fall in sales and forward-looking indicators for the heavy side, which is typically linked to the early structural elements of a building, highlights the upcoming gap in the pipeline of new construction orders and project starts, notably in the residential and commercial sectors and in southern regions of the country.