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CPA: Product Manufacturers Suffer Sharp Deterioration in Conditions in Q3

The Construction Products Association’s latest State of Trade Survey indicates that product manufacturers suffered from a slowdown in sales and exports in Q3 with problems for the sector were made worse by rises in cost inflation.

Commenting on the figures, Construction Products Association economics director, Noble Francis said: ‘Both heavy and light side manufacturers endured a fall in sales during the third quarter. Light side manufacturers had until recently enjoyed growth in export sales, offsetting the impacts of falls in domestic demand. Yet, export sales fell during the third quarter, adversely affected by euro zone uncertainty and global economic slowdown.

‘As a result, both heavy and light side manufacturers reported that they had reduced employment during the third quarter and, furthermore, with the construction sector anticipated to fall sharply over the next 18 months, it is unsurprising that product manufacturers reported they anticipated that employment would fall further in the next year’
‘With the Autumn Statement approaching in a couple of months and every £1 in construction generating £3 for the wider economy, it is vital that the Chancellor focuses on capital investment in ‘shovel ready’ repair and maintenance projects that are quick to get off the ground with framework contracts and planning already in place’.

Other key points include:
20% of heavy side firms and 41% of light side firms reported that sales fell between Q2 and Q3.
35% of heavy side manufacturers and 12% of light side manufacturers, on balance, reduced employment in the year to Q3.
15% of heavy side manufacturers and 6% of light side manufacturers, on balance, anticipate that employment will fall further over the next 12 months
50% of heavy side manufacturers and 29% of light side firms stated that costs had risen in the third quarter compared to a year ago.

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