UK: Cement and aggregates sales surge in first quarter

Sales of aggregates and cement grew during the first quarter of 2011 casting further doubts on dismal official construction figures.

Materials sales were up on the same period of the previous year and also the final quarter of 2010.

Aggregates sales volumes in total were 6% up in the first quarter compared with the first quarter of 2010, while cement, ready mixed concrete and asphalt sales were 16%, 19% and 10% up respectively.

The improvement was due to a shifting of sales from the poor weather-affected final quarter of 2010, and improved demand for concrete in London and the South East and asphalt nationwide for road maintenance work to fill potholes.

Mineral Products Association Chief Economist, Jerry McLaughlin, said: “The first quarter was stronger than we expected, which is partly due to some underlying improvements in construction activity such as office development in Central London and partly due to a catch up from the weather-affected end of 2010.

“In overall terms market performance has been relatively flat over the past six months and we do not expect sustained growth until 2013.

“We would not expect the first quarter growth trend to be sustained throughout the year because we have yet to see the full impact of the planned cuts in public investment.

“We are particularly concerned about the lack of funding to repair our local road network, in spite of the £200 million of emergency funding announced this year, and the prospects for recovery in commercial and housing markets outside the South East are patchy at best.”

Recent Government figures indicated a 4.7% reduction in construction during the first quarter of the year

McLaughlin said: “While we would not expect a precise correlation between our data and construction output figures, we think that there is sufficient evidence to suggest that the official figures underestimate both the decline in construction activity in the final quarter of 2010 and the recovery of work in the first quarter of 2011.

“This is an issue of wider significance because if, for example, construction output actually grew rather than fell by 4.7% in the first quarter, the GDP growth would have been a much more positive 1.1%.”