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Manufacturers optimistic for year ahead, says CPA

Sales increased for the first quarter of 2015, the eighth consecutive quarter, according to the latest State of Trade Survey from the Construction Products Association (CPA).  

Further growth is anticipated during Q2 and over the next 12 months, supported by domestic demand, exports and a reduction in fuel and energy costs. 

According to the CPA, a balance of 50% of heavy side firms and 29% of light side firms reported that sales rose during the first quarter of 2015, compared to a year earlier. In addition, 69% of heavy side product manufacturers and 57% of light side product manufacturers reported that they anticipate sales rising over the coming year.

Meanwhile, exports were down for 25% of heavy side firms and 14% of light side firms but 29% of heavy side firms and 20% of light side firms anticipate a rise in exports over the next year.

77% of heavy side firms and 64% of light side firms anticipate increasing investment in research and development (R&D) over the next 12 months

CPA economist, Rebecca Larkin, said: “Product manufacturers opened 2015 with another positive quarter of sales growth, which underscores how the strength of the UK economy over the last 18 months has translated into increased activity in the construction sector. 

“Developments in the global economy have benefited firms on the cost side, however.  Wages and salaries have been the key driver of cost inflation since 2014, but from the end of last year, this has been partly offset by the impact of lower oil prices, which averaged $64 per barrel in Q1.

Ms Larkin concluded: “Encouragingly, product manufacturers appear keen to capitalise on this sustained period of activity and shore up demand in the longer-term. Priority areas for investment over the next 12 months, cited by more than two-thirds of firms, were product improvement, research and development and e-business.”

 

27 April 2015

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