Partner Article

Demand waivers for manufacturers in Q2

Despite a strong start to 2012, manufacturers have witnessed a slowdown in sales during Q2, raising concerns over demand going forward.

Between Q1 and Q2, 45% of heavy side firms reported that sales fell, resulting in a 6% reduction of head count. By contrast, 20% of light side firms saw an increase in transactions, and 8% took on new staff, resulting in a marginal increase in employment over the whole sector.

The decline in product sales has been attributed to public sector spending cuts, and private sector construction adversely affected by events in the Eurozone.

Commenting on the figures, Construction Products Association senior economist, Kelly Forrest said: Sales of light side products, which tend to be used later in the construction process, continued to rise in Q2, yet the fall in heavy side sales suggests the second half of the year will become increasingly challenging.

“Nearly all of the firms responding to the survey expressed concern about the strength of demand over the next 12 months. It is their primary concern.”

Despite recent falls in oil and commodity prices, cost inflation continues to be a serious issue for product manufacturers. 84% of heavy side firms and 62% of light side firms reported that costs continued to rise as long term contracts have ensured that recent price falls have not fed through yet.

She continued: “Manufacturers continue to be boosted by exports, 11% of heavy side manufacturers and 25% of light side manufacturers stated that exports rose over the past year.

“Furthermore, a larger number of both heavy and light side firms are turning to exports to offset subdued domestic demand.

“40% of heavy side firms exported products in Q2 and 70% of light firms reported that they were now exporting.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .