MPA fears “fall away” in construction sector

Mineral Products Association (MPA) results for the first quarter of 2012 indicate a substantial reduction in sales of aggregates, ready mixed concrete and asphalt, confirming new GDP figures showing that declining construction activity has triggered the UK’s latest recession. Compared with the same period of 2011, sales volumes of crushed rock and sand and gravel aggregates declined by 13% and 12% respectively in the first three months of 2012, and sales volumes of ready-mixed concrete and asphalt fell by 9
April 30, 2012 Read time: 2 mins
5338 Mineral Products Association (MPA) results for the first quarter of 2012 indicate a substantial reduction in sales of aggregates, ready mixed concrete and asphalt, confirming new GDP figures showing that declining construction activity has triggered the UK’s latest recession.

Compared with the same period of 2011, sales volumes of crushed rock and sand and gravel aggregates declined by 13% and 12% respectively in the first three months of 2012, and sales volumes of ready-mixed concrete and asphalt fell by 9% and 17%. The MPA says that these products represent by far the largest flow of materials into construction markets and are used extensively throughout the construction sector. The figures follow a slightly positive overall performance in 2011 and suggest that construction activity is now in decline following some recovery from the depths of the recession in 2009.

Jerry McLaughlin, chief MPA economist MPA, said: “These figures represent real deliveries of materials to construction projects, not opinion survey data, and they indicate that there is a real likelihood that construction activity will fall away and constrain economic recovery as we move through 2012 and 2013.

“There has been some criticism of the ONS data released on Wednesday (25 April) which showed a 3% first quarter decline in construction compared with the fourth quarter and lower activity than the first quarter of 2011. These official figures are provisional, but they reflect just what our industry is experiencing on the ground.
“Outside the strong construction markets of Greater London and parts of South East England, lack of demand is becoming critical as public investment in construction falls away and there is little private sector construction growth to fill the gap.”

While the MPA said the government is right to focus on deficit reduction and maintaining financial credibility, it believes it is now necessary to take the opportunity to “drive” economic recovery throughout the UK with a sustained increase in infrastructure investment and social housing.

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