2014 MPA Sales Volumes Positive as Construction Markets Improve
Minerals products markets performed strongly in 2014 as construction output grew by 6%. Sales volumes accelerated for aggregates (11% growth made up of crushed rock + 13.5%, sand and gravel +7.2%) and asphalt (+8.6%).
Growth in ready-mixed concrete sales moderated in 2014 (+1.7%), but from a higher base following an early and marked recovery of the concrete market throughout 2013.
Asphalt and crushed rock sales were particularly strong in the second half of the year, due to increased road construction and maintenance activity as well as more general construction improvements. The increase in sand and gravel sales reflected general construction growth, particularly in new housing.
MPA’s seasonally adjusted figures indicate that sales volumes remained generally positive throughout the year. Seasonally adjusted fourth quarter sales were either positive (aggregates and asphalt) or flat (ready-mixed concrete), suggesting that construction markets remained more positive than official data suggest. The end of year performance was also supported by particularly favourable weather conditions.
Although the growth rate of construction has moderated since mid-2014, the outlook remains positive and we expect further growth in mineral products sales in 2015.
However, for sustained construction recovery there needs to be more broadly based growth, both geographically and by type of construction. In 2014, new housing, representing 24% of total construction, increased by 25%. The other 76% of construction output grew by less than 2% in 2014.
Although markets have improved throughout GB, regional performance remains patchy. To illustrate the uneven recovery, GB sales of ready mixed concrete in 2014 remained 30% below the pre-recession level in 2007, but in London the market was 25% higher.
Nigel Jackson, Chief Executive MPA, commented: “Construction and mineral products markets remain positive and should continue to improve in 2015, although there are potential downside risks and uncertainties related to political and economic uncertainties in the UK and Eurozone and wider geo-political issues. For the recovery to be sustained it is essential that politicians maintain focus on policies to promote sustained economic growth throughout the UK, by reducing uncertainty wherever possible to build the confidence needed to encourage continuing investment. The recovery continues to need to be nurtured and not taken for granted.”
