MPA: subdued 2Q sales, prospects positive

MPA: subdued 2Q sales, prospects positive
Published: 03 August 2015

Tagged Under: MPA 

Sales volumes of aggregates and ready-mixed concrete were four per cent higher and asphalt 10 per cent higher in the second quarter of 2015 than in the same quarter of 2014, latest data from the MPA shows. For the half year to June, sales were also positive in comparison with 2014, with aggregates and concrete seven per cent higher and asphalt sales 10 per cent higher.

There are nonetheless indications that construction markets may have slowed down temporarily, the MPA notes. Seasonally adjusted data for the second quarter, which strip out the effect of seasonal factors, such as weather variations and public holidays, indicate lower underlying sales in the second quarter of 2015 compared with the first quarter.

On this seasonally adjusted basis, second quarter asphalt and concrete sales were broadly flat (+0.3 per cent and -0.7 per cent, respectively) and aggregates sales declined (crushed rock -3.7 per cent and sand and gravel -7.2 per cent) relative to the first quarter of the year.

While there may be “technical” reasons contributing to the second quarter seasonally adjusted figures, the MPA says latest GDP figures also indicate that second quarter construction output was flat compared with the first quarter. Anecdotal information has suggested some flattening of demand growth, and it is possible that some markets experienced a pre-election slow down followed by a rebound from June.

However, expectations for construction output and mineral products demand remain positive for 2015 and the following years, the association points out. Activity will be supported by further growth in housing construction, improvements in commercial and infrastructure work, including the implementation of major investment programmes, and evidence of economic activity spreading beyond London and South East England.

Nigel Jackson, Chief Executive MPA, commented: “Although there has been an underlying slowdown in recent construction activity, prospects are positive given the renewed Government commitment to housing and infrastructure improvements and boosting city/regional development. It will be critical that the operation of the planning and regulatory systems enable the industry to meet future and growing demands and support UK competitiveness and it is very positive that the Government is very engaged with MPA on these issues.”

MPA membership is made up of the vast majority of independent SME quarrying companies throughout the UK, as well as the nine major international and global companies. It covers 100 per cent of GB cement production, 90 per cent of aggregates production, 95 per cent of asphalt and over 70 per cent of ready-mixed concrete and precast concrete production.