Data from Construction Products Association shows manufacturers experiencing falls in trade while price of raw materials rises

Nearly nine out of 10 heavyweight construction products firms reported “significantly” falling sales in the last three months, according to the latest data.

The Construction Products Association’s third quarter trade survey found that 86% of “heavy side” manufacturers reported significant falls in trade, with three quarters of “light side” manufacturers also reporting falls. At the same time a majority of both groups said they had seen an increase in costs because of rises in the price of raw materials.

Three out of five contractors said that output in the industrial sector had fallen and half said that output in the commercial sector had fallen in the same period.

The CPA said prospects for the sector looked “bleak”, with the sector on course to show its largest ever decline in output this year, and fall further next year.

Noble Francis, economics director at the CPA, said the fall in construction activity predicted by earlier forecasts was now being bourne out.

He said: “All areas of construction have contracted during the last quarter. This is a critical time for the industry, which is not expected to see any growth until 2011 at the earliest.

“It is vital that government does its utmost to ensure spending is maintained on the housing, schools, hospitals and transport infrastructure for which the long-term demands will not disappear, despite the recession.”

Stephen Ratcliffe, director of the UK Contractors Group, said: "This report makes grim reading and demonstrates more than ever that the construction industry needs to be selling itself more aggressively as a means of helping the UK out of recession."