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Materials suppliers see sales crash

A poll of construction products manufacturers has revealed some of the most damning figures yet for the state of the construction industry. By Mark Lewis

Every firm in the Construction Products Association’s Activity Barometer reported fewer sales in the second quarter of 2009 than in the same quarter last year.

And predictions for sales in Q3 promise more woe.

The overall figure of zero manufacturers selling more than a year ago, represents the worst tally in the history of the survey. It is made all the more stark since the comparable quarter in 2008 was already in negative territory.

“I was shocked because I have never seen a zero,” said CPA economic policy development director Noble Francis. “I would have expected at least one company to have reported better sales. This really is bad.”

Early signs that the worst appeared to be over proved short lived when April and May’s sales plummeted – for both heavy side and light side products.

Light side sales, while still falling for the last three quarters, had held up better than sales of heavy side products. But the results of this survey represent a new phase in market depression, according to Mr Francis.

“It signifies a new phase. Last year housing was slowing down, so manufacturers feeding directly into it were the worst affected,” he said.

“The economic situation has now become so entrenched that it has affected every sector of the construction industry.”

He said that while the housing market remained poor, there were now sharp falls in all sectors.

“Repair and maintenance, which represents most of the light side, isn’t as glamorous as the other side of construction, but it is still 45 per cent of the construction industry,” he said. “And people are now putting off repairs.”

The combined Ernst & Young and CPA survey, widely regarded as a good barometer for the overall state of the construction industry, predicts more bad news to come.

An overwhelming majority of respondents expected prospects for next quarter to be equally black, and the Construction Products Association has predicted more job losses across the industry.

Some 70,000 jobs in the construction products industry have already gone, with a further 12,000 on short-time working.

Mr Francis said that with predictions of future performance in deeply negative territory, more losses appeared inevitable.

About 60 firms are surveyed every three months for the CPA survey.

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