First quarter aggregates and cement sales highlight importance of post-election construction and economic policies

7 May 2010

The results of the MPA's Market analysis for the first quarter of 2010 indicate that sales volumes of crushed rock and asphalt increased by 6 per cent and 9 per cent respectively compared with the first quarter of 2009, but cement, sand and gravel and ready-mixed concrete sales all declined (by 3 per cent, 6 per cent and 7 per cent).

The positive figures are a reflection of progress on national road schemes and work to repair local roads following the freezing weather earlier in the year, although the growth is from historically low market levels.

The cement and concrete trends indicate that general construction activity remains very depressed – supporting the prediction in the latest CPA construction forecast that construction output will decline by 3 per cent this year.

Commenting on the results, MPA Executive Director Simon van der Byl said 'these results show how sensitive the construction materials and construction markets are to the outcome of the general election. We see a welcome increase in demand from road contracts due to the previous government's accelerated investment in this area. However, these and other public construction markets face swingeing cuts if existing plans to half public investment spending in order to finance high public debt interest payments are implemented by a new government'.

Simon van der Byl added 'the most effective means of successfully managing the public sector debt is to encourage rapid economic growth, and one of the most effective engines of economic growth is construction investment – each £1 invested in construction generates £2.84 of economic activity.

We also remain extremely concerned that the localisation of the planning system set out in the Conservative and Liberal Democrat Manifestos has the potential to severely constrain recovery in the housing and private development markets – therefore damaging the potential for sustained economic recovery.

A new government has a clear choice. It can support and promote construction actively through its investment and planning policies and therefore accelerate economic recovery, or it can choose policies which will constrain construction and economic recovery'.