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25 January 2013
Evidence of a rapid decline in construction activity in 2012 has been confirmed by MPA sales survey results for 2012 which indicate a reduction of 9% in aggregates, cement and ready mixed concrete markets in 2012 and an 18% decline in asphalt sales. The provisional construction output figures for 2012 indicate a 9% fall during the year.
The rate of decline of aggregates, cement and concrete sales moderated in the fourth quarter, but in general markets remained very depressed throughout the year. Aggregates, asphalt and concrete are by far the largest elements of the construction supply chain and are used extensively throughout the construction industry. Today’s GDP results confirm that the decline in mining and quarrying and construction activity represents a major drag on the UK’s economic output – if construction markets had been flat in 2012 overall GDP would have increased by 0.7% instead of the recorded GDP standstill. The MPA results are based on actual sales volumes recorded by a high and representative sample of industry companies and illustrate the reality of construction markets in 2012 as opposed to sentiment and speculation.
Asphalt sales are related closely to road maintenance and construction activity and the recorded 18% reduction in sales confirms that local authorities have had severe funding constraints for maintaining roads and that the road construction market has experienced a severe decline. Detailed construction output data for the first nine months of 2012 showed that road construction fell by 44% compared with the same period of 2011.
Commenting on the figures, Nigel Jackson, Chief Executive MPA, said
“The MPA figures for 2012 highlight the scale of decline in construction industry markets in 2012. This was the lowest year for aggregates and concrete sales since 1965. We welcomed the increased funding for construction announced in the Autumn Statement but these increases are less than the volume of construction lost in 2012. In these circumstances it is now critical that we see real and accelerated delivery of the huge backlog of outstanding infrastructure projects. There has been enough discussion of the need for more and better infrastructure whether for housing, energy, utility or transport and the financing required. This is all now recognised and accepted. 2013 has to be about delivery, delivery, delivery. MPA maintains its offer to work with all arms of Government to help secure the growth we need to turn the economy around.”