The Construction Products Association (CPA) has warned that an economic slowdown in Europe and cost inflation threaten further economic recovery in the UK construction products industry.
The Association’s latest State of Trade Survey shows that although a eurozone crisis appears to have been averted for the time being, the prospect of weakness in the major European economies and increasing global energy and raw material prices remain a threat.
CPA senior economist Kelly Forrest said: “With more than 75% of construction products exports being absorbed into the European market, recent forecasts from the OECD indicating a slowdown in key eurozone countries, such as Germany and France, potentially threaten prospects of further growth for product manufacturers.
“Construction product manufacturers have also been hit hard by rises in fuel prices. More than 90% experienced fuel price inflation in the first quarter. Oil prices recently reached US$125 per barrel, their highest level in almost four years and the full effects of this will be felt throughout 2012.”
On a brighter note, the survey also found that at +7%, the heavy side sales balance entered positive territory for the first time in three quarters. Some 36% of heavy side firms and 34% of light side firms anticipate that sales will increase over the next year.
