Construction products dip but outlook brightens

The results, released by the Construction Products Association, showed that, in the second quarter of this year sales are lower than the equivalent time last year.

On an index with 50 being the point of equilibrium, sales dropped to 45 in the second quarter of 2005, down from 55 in the first.

Michael Ankers, CPA’s chief executive, said that the reversal of fortunes was particularly apparent in so-called ‘lightside’ products such as doors, windows and plumbing equipment due to a fall in the housing market.

He said: “This part of the market has been particularly affected by the fall in consumer spending and uncertainties created by the General Election. Many heavy manufacturers also continue to report sales below those seen last year.” Ankers puts this down to delayed infrastructure projects.

However, he seemed optimistic about the near future: “Looking ahead, the construction products industry is more optimistic about the third quarter of the year with the index of all manufacturers at 54, indicating that there is a level of expectation that there will be higher levels of sales in the third quarter of this year compared with the third quarter of 2004.”

This optimism, however, relies on the government’s planned investment in schools, hospitals and social housing the CPA said.

These results echo a survey released on construction workloads by the RICS said last week, which found that growth in construction activity had eased in the first half of 2005.