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Heavy material sales fall again

21 Jan 13 The Construction Products Association’s latest state of trade survey indicates that, following a disappointing Q2 and Q3 last year, heavy side sales fell once again in Q4 but light side sales rose.

Some 13% of heavy side companies reported a fall in quarterly sales, while 46% of light side firms indicated that sales were higher compared with Q3.

A balance of 9% of heavy side producers experienced a decline in sales year-on-year while a net 21% of light side companies stated that sales were higher compared to Q4 2011.

Looking ahead, further divergence between heavy and light side sectors is expected over the next 12 months. Light side manufacturers remain optimistic about future prospects and a third of producers expect sales to rise by more than 5% during 2013, with export sales expected to boost performance.

In contrast, heavy side products have now recorded three consecutive quarters of falling sales volumes. With the UK construction market set to fall in 2013 and a smaller proportion of heavy side sales going abroad, the outlook for heavy side products remains challenging.

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Commenting on the figures, Construction Products Association economist Milja Keijonen said: 鈥淎fter two disappointing quarters, sales of heavy side products fell once again due to difficult market conditions in the construction industry, where output fell 9% in the past year. However, sales of light side products rose in Q4 as the difficult domestic market was offset by strong exports to fast growing Asian economies.

鈥淟ooking to the year ahead, both heavy and light side manufacturers expect this to continue. Heavy side manufacturers anticipate sales to fall in 2013 due to a subdued domestic market, where construction output is forecast to fall by 2.2%. However, light side manufacturers predict sales will increase in 2013, once again driven by export growth.

鈥2012 was a difficult year for the industry, certainly for heavy side manufacturers, and 2013 is also likely to be extremely challenging. Light side manufacturers are going to be heavily reliant upon exports if they are to achieve significant growth in the next 12 months. Yet, risks for product manufacturers are clearly on the downside due to the prevailing economic conditions and the effectiveness of government initiatives to boost construction.鈥

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