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Construction product sales growth stalls

Sales for construction products have slowed according to the latest Construction Products Assocation survey of manufacturers.

The CPA’s Q2 State of Trade survey reveals that sales of heavy side products were back into decline, after two quarters of growth. On balance nearly one quarter of heavy side manufacturers said that sales contracted last quarter compared to Q2 2011, with one fifth saying that the decline was more than 5 per cent.

For light side manufacturers sales were up on balance for the sixth consecutive quarter, attributed to the sub-sector’s wider exposure to the overseas markets.

But expectations for sales growth over the next 12 months were downgraded for both heavy and light side manufacturers, with 19 per cent of light side manufacturers anticipating growth, compared with around one third on balance the previous quarter. Heavy side manufacturers on balance expected sales to fall further over the yaer, compared with a balance of one third predicting growth in the previous survey.

The CPA survey also found that unit costs are still rising, but at a a slower rate. The survey report said: “Inflationary pressure on input costs persisted in the second quarter of the year, but the rate of increase moderated. A weakening in demand drove reductions in raw materials, fuel and energy prices, but long-term supply agreements mean that reductions are slow to impact on manufacturers’ costs. The majority of manufacturers now face input cost inflation of 5 per cent or less.”

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