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Materials exports to Asia soar

But Construction Products Association warns manufacturers of tough 2012

The number of firms exporting lightweight construction materials to Asia has rocketed as they hunt for markets outside troubled Europe, a new survey has found.

The Construction Products Association’s State of Trade survey found 35 per cent of makers of “light side” construction materials, such as lighting, plasterboard and air conditioning, sold products in Asia in the final quarter of 2011. In the past they made about 10 to 15 per cent of their sales in the region.

Over a third of light side manufacturers saw growth in their exports in the past year and a further 55 per cent maintained export  levels.

The rise in exports amongst manufacturers of heavy construction goods, such as cement, bricks and gravel, was a more subdued 17 per cent in the last year. 13 per cent of “heavy side” firms traded in Asia in the final three months of 2011.

Kelly Forrest, senior economist at the Construction Products Association, said it was easier to export lightweight goods to Asia rather than heavy materials because of lower transport costs, a weak pound and the potential for larger profit margins on niche or high-end products.

“Europe is still the main export market [for light construction goods] but firms have started to export elsewhere. Heavy-side manufacturing is more exposed to a Eurozone breakup which is quite a concern,” she said.

The CPA said even tougher times could be ahead for construction product manufacturers. Sales in 2011 were bolstered by publicly financed work in progress which had been slow to start, a brief rally in the private sector and strong export growth.

But public spending cuts, further difficulty in the private sector and a drop in construction work in the Eurozone could slash demand in 2012.

The survey does not produce separate figures for the domestic market, but overall sales including the UK were more subdued than exports. For example 43 per cent of heavy construction goods manufacturers reported a fall in overall sales in the past quarter yet only 16 per cent reported a drop in exports.

Makers of light construction goods were more likely to report increased sales in 2011 and predict growth in 2012 than heavy product manufacturers.

Half of light materials manufacturers said sales had grown in the last quarter of 2011 against 22 per cent of heavy goods makers. Three per cent more firms on the heavy side anticipated sales falls rather than rises in 2012 whereas 19 per cent more light firms expected rises rather than falls next year.

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