Signs of weakness in the supply chain

The construction industry experienced a mixed quarter for products sales, output and new orders in the opening three months of 2019, according to a quarterly survey of the supply chain’s product manufacturers, contractors, civil engineers and SME builders by the Construction Products Association.

The Construction Products Association’s Construction Trade Survey for 2019 Q1 shows that during the quarter, sales of construction products rose according to 54% of heavy side manufacturers and 29% of light side manufacturers.

In contrast, 20% of main contractors reported a decrease in output during the quarter, while workloads were reported lower for 17% of civil engineering contractors and 7% of SME builders.

Only product manufacturers and SME builders reported positive readings in forward-looking indicators, with a broad-based fall in new orders reported by main contractors and civil engineers.

Rebecca Larkin, senior economist at the CPA, said: “Confidence among consumers and businesses remains low and this has reduced the amount of work coming through to the two largest construction sectors – private housing and commercial – which require greater visibility over the economy’s future growth path to see projects get the go-ahead. By itself this raises concern over the extent to which the political stalemate over Brexit is affecting UK construction, but the risks are intensified when combined with the prevailing narrative of rising costs for labour, raw materials and fuel eroding contractors’ margins.”