Rising construction product sales during the second quarter signal a quickening in construction growth, according to the Ernst and Young/Construction Products Association Activity Barometer.

The second quarter of 2007 records a score of 80 compared to a score of 74 in the first quarter, significantly above the 50 ‘no change’ mark. Yet again product sales volumes have set a new highest level since the survey started in 2005.

Commenting on the results, Allan Wilen, Economics Director for the Construction Products Association said: “The Barometer findings indicate that the pick-up in construction output is becoming more widely based, with a high proportion of both heavy and light side firms now indicating that sales volumes are ahead of a year ago.

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“The acceleration in heavy side sales is especially notable. Over the last two years heavy side sales growth has been hampered by a weak infrastructure sector and the trend towards building smaller homes and apartments. This reading of 77 for the second quarter is a marked improvement, with expectations also high for the coming three months as firms benefit from strong non-residential activity. Firms also report that there has finally been a modest pick-up in water industry capital expenditure, although other key areas of infrastructure work – in particular roads- remain weak.

“Light side firms are still the most optimistic, although the 96 score seen in the previous quarter is down to 85. This index reading is still indicative of a positive market, though firms report that margins remain under pressure. Light side manufacturers expect a further moderation in growth during the third quarter, with an index reading of 78.

“Overall the industry as a whole anticipates a steady increase during the third quarter of 2007. This confirms the Construction Products Association’s assessment in its recent Forecast that construction industry growth will strengthen to 3.1% this year.”

(CL)