Industry records strong start to 2007

Driven by a strong light side performance, product sales volumes for the construction industry have hit a two year high.

According to the Ernst and Young/Construction Products Association Activity Barometer the first quarter of 2007 has registered a score of 74, well above the 50 ‘no change’ mark.

While this is the highest level since the survey started in 2005 it was held up by light side sales, with heavy side firms recording a less dramatic reading of 61. This is attributed to a slow start to the year by private house builders and the slow-moving infrastructure sector.

“Light side sales continue to benefit from increased demand for insulation and related products following the introduction of the new Part L building regulations,” explained Allan Wilen, economics director for the Construction Products Association. “Light side firms have also reported a welcome boost from the government’s investment programmes to bring the existing social housing stock up to standard.”

Looking forward industry growth is expected to increase during 2007, driven by stronger private sector investment and an increase in government funded work. However, consumer related areas such as new private housing and repair, maintenance and improvement work are expected to be hit by interest rate rises.

Commenting on the results, Ernst and Young partner and construction specialist, Simon Oldfield said: “Whilst there continue to be some regional variations, the major UK house builders have been putting out generally optimistic trading statements and this, coupled with continued follow through on government spending promises, suggest that the favourable conditions shown by the Activity Barometer should be sustainable throughout the remainder of 2007.”