Construction manufacturers predict tougher times ahead

The final quarter of 2007 records a score of 69, the lowest for 2007, as the housing slowdown begins to impact on both light and heavy sides.

But this score is still firmly above the 50 no-change mark.

Máren Baldauf, economist for the Construction Products Association, said: “The Barometer findings indicate that, although there is plenty of activity across the industry, the prospects looking forward are giving some cause for concern.

“Both heavy- and light-side firms now anticipate the sharper-than-expected downturn in the housing market will constrain sales growth this year.

“Significantly, heavy-side firms for the first time this year are more optimistic than light-side firms because of the expected recovery in infrastructure activity, mainly due to a recovery in water companies’ investment and rail improvement programmes.

Dominic McAra, a director in Ernst & Young’s building products team, said: “The fall in light-side confidence in the current quarter reflects a trend that we are seeing of companies having a much tougher second half of the year, as people tighten their belts, often after a buoyant first half.

“We consider tight supply chain and cash management will be crucial over the next few months.”