Manufacturers' sales boost fuelled by lower costs

Manufacturers' sales boost fuelled by lower costs

The Construction Products Association's latest State of Trade Survey for the fourth quarter of 2014 shows that manufacturers of construction products ended the year with continued growth in sales.

A further increase in sales is expected for the year ahead and optimism extends beyond the domestic market, with increased demand from overseas markets anticipated during 2015.

Key points from the survey include:

  • 44% of heavy side firms and 87% of light side firms reported that sales rose during the fourth quarter of 2014
  • 61% of heavy side product manufacturers and 60% of light side product manufacturers reported that they anticipate sales rising over the coming year
  • 33% of firms on both the heavy and light side reported that costs rose in Q4 compared with a year earlier
  • Fuel costs fell for 61% of heavy side firms and 20% of light side firms, to the lowest balance recorded in the survey
  • 18% of heavy side manufacturers and 25% of light side firms reported that exports rose in Q4
  • 50% of heavy side firms and 70% of light side firms anticipate a rise in exports during 2015

Construction Products Association economist, Rebecca Larkin, said: "The latest survey results reflect the fact that the recovery in construction is broadening from private housing to commercial, industrial and infrastructure. Growth in sales of construction products was reported by both heavy side and light side manufacturers, suggesting increased activity at all stages of the building process.

"Sales growth in Q4 was also supported by favourable exchange rate conditions, which helped drive external demand from outside the Eurozone. Furthermore, against this backdrop, more than half of heavy and light side manufacturers anticipate exports will continue to rise over the next 12 months.

"Firms also increased their headcount in the year to Q4 in response to these higher sales and reflecting the positive outlook going forward. Hiring intentions for the coming 12 months remain strong: 61% of heavy side firms and 40% of light side firms plan to increase employment in 2015.

"In addition to rising demand, manufacturers' optimism was no doubt boosted by receding cost pressures. The downward shift in global oil prices reduced fuel costs for the majority (61%) of heavy side firms in Q4, the first negative balance recorded in the survey."

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