Pessimism dominates construction outlook despite 13th consecutive quarter of growth

Construction Products Association CPAA thirteenth consecutive quarter increase in the sale of construction products has did little to quash growing pessimism about prospects for the coming year ahead.

The latest State of Trade Survey from the Construction Products Association reported continued growth in sales of construction products in the second quarter of 2016.

However the survey added that manufacturers displayed a growing pessimism about future prospects, even though 75 per cent of responses were received prior to the EU referendum.

Key survey findings include:



  • A balance of 52 per cent of heavy side firms and 31 per cent of light side firms reported that construction product sales rose in the second quarter of 2016 compared with Q1
  • On an annual basis, sales rose for 57 per cent of heavy side firms, but no firms on the light side, on balance
  • On balance, 13 per cent of heavy side manufacturers anticipated a fall in sales in Q3, the lowest balance since 2012 Q4


  • On the light side, a zero balance was recorded for expectations in Q3, whilst 14 per cent expected a decline in product sales over the next 12 months
  • 60 per cent of firms on both the heavy and light side anticipated an increase in export sales over the next year
  • Annual cost increases were reported by 41 per cent of heavy side manufacturers and 29 per cent of those on the light side.


  • Rebecca Larkin, CPA senior economist, said: “Construction product manufacturers’ sales growth strengthened in Q2, suggesting that construction activity remained resilient against a backdrop of growing uncertainty in the run-up to the EU referendum at the end of the quarter.

    “Compared to the first quarter of 2016, a balance of 52 per cent of heavy side firms reported a rise in sales in Q2. This was the highest balance in a year and increased from 31 per cent in Q1. On the light side, 38 per cent of firms reported a rise in quarterly sales in Q2, up from 13 per cent in Q1.

    “However, pessimism prevailed in manufacturers’ views for the months ahead, even with the majority of responses coming in before the existing economic uncertainty intensified following the referendum result. For heavy side manufacturers, sentiment was the lowest in three years and 13 per cent of those firms anticipated a fall in sales in Q3. Among manufacturing firms on the light side, forward-looking sales expectations were the weakest since the financial crisis, with a downturn anticipated for the first time in six years.

    “Sterling depreciated 8.4 per cent against the Euro in Q2 compared to a year earlier, which may be one favourable side effect linked to the economic uncertainty pre- and post-referendum for product manufacturers that export to Europe. The majority (60 per cent) of firms on both the heavy and light side anticipate an increase in overseas sales over the coming year.”


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