Manufacturers’ Sales Continuing To Rise
THERE has been strong growth in the sales of construction products, including flooring, in the second quarter of 2014, according to latest state of trade survey from the CPA (Construction Products Association) (Q2 2014).
Companies are increasingly optimistic for the future and, for the first time in five years, product manufacturers report increases in levels of capital investment across all areas of their business.
Following on from Q1, both heavy side and light side firms find higher cost pressures stemming from wages and salaries. Whereas lack of demand remains a major concern for light side manufacturers, data from heavy side firms suggests that capacity pressures may be emerging.
Kallum Pickering, CPA senior economist says: ‘These results confirm that the construction products industry is firmly on the path of recovery.
‘All firms reported higher sales compared with the second quarter of last year and, looking forward, none expect sales to fall over the coming year. These findings are in line with the recent broadening of growth across private construction.
‘There are clear signals that producers seek to capitalise on the positive growth outlook. Both heavy and light side firms see capital investment increasing across all areas of business. Investment intentions over the next 12 months are equally positive.
‘Manufacturers increased staff headcount for a fourth consecutive quarter, and whilst this is positive news, data on cost inflation suggests that wages are beginning to add significantly to rising costs of firms.
Meanwhile, 95% of heavy side firms and 80% of light side firms indicated that wages and salaries contributed to cost inflation in Q2 for 80% of light side firms and 95% on the heavy side.’
Key points of the survey include:
100% of manufacturers, on balance, reported a rise in sales in Q2 compared with last year;
83% say they anticipate sales rising over the coming year;
65% anticipate sales rising by over 5% in the next year;
87% reported a rise in costs primarily due to wages and salary;
46% said costs rose in Q2 compared to a year ago and 62% expected costs would rise in 2014.
This article has been reproduced from the Contract Flooring Journal. You can find them at www.contractflooringjournal.co.uk.