Construction growth boosted by heavy side sales

Driven by a rise in heavy side sales, construction growth has accelerated during the second quarter according to the Ernst and Young/Construction Products Association Activity Barometer.

A weak infrastructure sector and the trend towards building smaller homes and apartments had been hampering heavy side sales over the last two years. But the pick up is now across the sector, with a high proportion of both heavy and light side firms reporting sales volumes ahead of a year ago.

Registering a barometer score of 80 compared to 74 in the first quarter, significantly above the 50 ‘no change’ mark, product sales are at the highest level since the survey started in 2005.

Light side firms are still the most buoyant with a score of 85, while the reading for heavy side sales has risen to 77.

Commenting on the results, Allan Wilen, economics director for the Construction Products Association, said: “The acceleration in heavy side sales is especially notable. This reading of 77 for the second quarter is a marked improvement, with expectations also high for the coming three months as firms benefit from non-residential activity.

“Firms also report that there has finally been a modest pick-up in water industry capital expenditure, although other key areas of infrastructure work – in particular roads – remain weak.”

Dominic McAra, a director in Ernst & Young’s Building Products team said: “Our clients are still seeing the UK as an attractive market – and are anticipating both organic growth and growth by acquisition.

“This is underlined by the number of construction products related transactions recently, with investment coming into the sector from a number of overseas players.”