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05 Jun 2019

Latest Construction PMIs Confirm the Need for the Faster Delivery of Infrastructure Projects and Programmes

The UK Mineral Products Industry is an essential and key enabling industry for investment in housing, infrastructure and other development to be realised.

The latest construction Purchasing Managing Index (PMI) data released on 4th June provides further evidence of weakening construction activity, following MPA data which indicated that sales of mineral products such as aggregates, asphalt, concrete and mortar declined in the first quarter.

The latest PMI data, showing a decline in construction output, particularly for civil engineering, illustrates the importance of accelerating delivery of approved infrastructure plans. In its recent Comprehensive Spending Review submission and letter to the Chancellor, the Mineral Products Association (MPA) stressed that UK supply chains are still hampered by over-promising and under-delivery of infrastructure projects. More reliable, longer-term programmes are needed to ensure the capacities and capabilities are in place to build, improve and maintain our infrastructure. The only positive construction and PMI data currently is for housing, but MPA evidence of lower mortar sales suggests that relying on new housing to drive overall construction is a risky expectation.

These projects are key to supporting jobs in the sector and supply chain, and jobs are now being lost due to the lack of delivery. The industry is also concerned that having invested in new and improved production capacity particularly in asphalt and concrete planned demand is not materialising.

MPA Executive Director, Economics and Public Affairs, Jerry McLaughlin said: "The falling construction PMIs add to concerns about construction activity highlighted in the MPA's first quarter data, which showed declines in all products compared with Q4 2018.  Unless we see greater urgency on the delivery of planned infrastructure projects there is little prospect of construction contributing positively to GDP over the next two years. The mood music for major infrastructure projects seems to be getting less positive and there is a danger that political distractions are taking Government's eye off the ball. MPA's CSR submission calls for a greater focus on infrastructure project and programme delivery and the latest PMIs and other evidence of slowing construction add weight to this issue."