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Manufacturers positive after leap in sales

Sales of construction products rose strongly in the third quarter of 2013 driven by housing and infrastructure products, according to a new survey.

The Construction Products Association’s state of trade research found a net balance of 78 per cent of makers of heavy products, such as cement, said sales had risen in the third quarter of the year.

The figure was the most positive response from heavy-side manufacturers since the start of 2008, although sales are picking up from a low base.

A balance of 63 per cent of manufacturers of light products, such as fittings and services, said sales were up in the third quarter.

The reading was the best since the start of 2010 for light-side firms.

Year-on-year sales volumes also bounced back in the third quarter, having fallen in the first half of the year because of cuts to public sector construction. Over half of heavy-side manufacturers and 60 per cent on the light side reported a rise in activity, on balance, in the third quarter.

Manufacturers were also optimistic about prospects for the next year with just over 40 per cent of light and heavy product makers expecting sales to be up to 5 per cent higher then.

Employment was broadly flat in the third quarter and almost a third of light-side and 40 per cent of heavy-side firms said more than 30 per cent of their capacity was unused.

But over half of heavy-side and 28 per cent of light-side firms, on balance, expect to increase their headcount in the next year.

Construction Products Association economist Milja Keijonen said: “The third quarter of 2013 saw sales significantly rise across the board. Exports supported the growth but even the domestic market showed signs of recovery. 

“Looking ahead, product manufacturers are increasingly optimistic about Q4 sales growth and most are expecting higher sales over the next 12 months. The wider economic outlook has steadily become more positive, which should support recovery in construction and demand for building products. We note that employment for product manufacturers is still flat, though sentiment is increasingly positive. 

“Altogether, the results highlight the improving state of the market; however, concerns do remain about the sustainability of the recovery with most manufacturers reporting that domestic demand could prove to be a future constraint.”

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