The latest survey of industry sales volumes from the UK
Aggregates and asphalt sales were 4% lower than the second quarter of 2010 and ready mixed concrete and cement sales 2% and 1% higher respectively than a year previously.
Taking into account the positive first quarter in 2011, the markets have been stronger in the first half-year than had been expected due to some growth in private sector construction in early 2011 and continuing activity in public sector construction markets.
Concrete demand has risen steeply in London and parts of the south-east in response to the start of a number of major projects but elsewhere in Great Britain there is little underlying growth.
However, the decline in aggregates (notably crushed rock) and asphalt sales in the second quarter of 2011 indicates that government’s public investment cuts are now beginning to bite and central and local government spending on road maintenance and improvement is turning negative, says the survey.
Revised construction output figures for the second quarter published by the Office for National Statistics indicated that construction output in the second quarter was marginally higher than the first quarter (+0.5%) but lower than the second quarter of 2010 (-1.6%), largely due to declining public sector construction.
The MPA data provides further indications that construction activity is likely to fall in 2011 following the surprisingly high growth figures in 2010 and prospects for 2012 industry markets look negative.
Nigel Jackson, CEO said: “These latest figures support growing concerns about the performance of the construction sector over the next two years. MPA believes that more urgent attention must be given to implementing policies which will encourage growth and employment, notably investment in housing, road and transport improvements and energy infrastructure, urgently reviewing the cumulative level of carbon and energy taxation and really improving the planning system.”