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Construction product sales boom despite rising inflation

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The Construction Product Association’s most recent Trade Survey, published at the end of May 2022, discovered that construction products and materials manufacturers have experienced a rise in sales in the first quarter of 2022- in spite of the rise in inflation and costs placed on the industry.

The product survey predicts that sales will continue to grow during 2022. However, input prices will rise at the same time.

The key findings

The key findings of the survey cover information about infrastructure orders, workloads for surveyors and SMEs, and product sales within the products manufacturing sector:

  • Infrastructure orders increased in Q1. 40% of civil engineering firms reported an increase in infrastructure orders.
  • Workloads for surveyors increased in Q1.
  • Workloads for SMEs increased in Q1. 45% of FMB members reported a rise in their workloads. 15% reported that their workloads had fallen.
  • Product sales increased in Q1. 55% of heavy side firms and 86% of light side firms reported a rise in their sales.

The details

The findings of the CPA’s Construction Trade Survey indicate a strong upward trend for the construction industry. This is encouraging news in the face of rising inflation costs, fuel prices, and the crisis in Ukraine.

The survey emphasises that the rise in costs for fuel, energy, and raw materials is still a defining factor for costs across the construction industry. Data from BIES shows that in Q1, the cost of materials rose by 21.9%. This is reportedly higher than the rise in UK CPI inflation for the same period, which itself is at a historic high.

According to the survey, a driving factor behind the rise in inflation costs is materials for SMEs. Product manufacturers also reported an increase in energy and fuel costs in Q1 of 2022.

“Inflation can be seen throughout the supply chain. It’s particularly acute for energy-intensive heavy side firms. Data from BEIS has shown year-on-year increases of over 20% in construction products and materials prices since August 2021. It is, therefore, no surprise that materials were the key driver of SME builders’ costs in Q1.”

– Rebecca Larkin, CPA Senior Economist

By the way – what’s a Trade Survey?

Construction Trade Surveys analyse current trends within the construction industry. The products manufacturing sector is a focus of the survey. They are carried out by the Construction Product Association, a UK organisation representing construction product manufacturers and suppliers, using data from surveys compiled from across the industry.

The aims of the reports are to provide policymakers, members of the product manufacturing sector, and the wider industry with a more in-depth understanding of the current standing of the construction market. This is so that they can facilitate planning and business developments more effectively.

 

Read the full Trade Survey from the Construction Products Association here.

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