Prospects for manufacturers look good for the first quarter of this year, according to a survey published by the Construction Confederation and the Construction Products Association.

The survey said 78% of manufacturers expected higher sales this quarter.

An increase in output was anticipated by 41% of contractors – more than had been expected. Growth prospects were centred on government investment in health and education and developments in social housing. Infrastructure investment continued to be weak and only a modest recovery was predicted in transport investment in the next year.

A rise in materials prices also looks set to take its toll. Michael Ankers, chief executive of the CPA, said: “Higher raw materials and energy costs are starting to feed through to material prices, and there is a prospect of further acceleration in material price inflation during 2005.”