Construction Products Industry Barometer Predicts Further Job Losses

The sale of construction products is expected to decline further over the coming months, leading to more job losses and continuing gloomy conditions according to the latest Ernst and Young/ Construction Products Association Activity Barometer.

A total of 60,000 jobs have already been lost to the industry with a further 9,000 losses announced in the last three months, but this latest prediction is expected to result in even more job losses over the coming months.

The survey once again records a new low, giving an overall score of just eight for the first quarter of the year against a 50 mark representing 'no change' and contrasts dramatically with a score of 80 less than two years ago.


Commenting on the results, Noble Francis, Economics Director for the Construction Products Association said: "Once again the heavy side manufacturers are indicating the severest conditions, recording an unprecedented score of zero for the last three months as their sales continue to decline. The future picture also shows that virtually all manufacturers are expecting sales to carry on decreasing as the recession continues.

"Similarly light side manufacturers are enduring sales falls albeit it from a higher base, but they too are now predicting a very gloomy few months as their figures are expected to match those that the heavy side is currently experiencing."

Dominic McAra, a Director in Ernst & Young’s Construction Products team said the last quarter has been particularly tough for Construction Products companies: "The recession, coupled with the coldest winter for several years, has adversely impacted sales and cash flows.

"It will be the companies with strong cash reserves that will find 2009 the least painful and therefore it is no surprise that a number of the larger companies in the sector have had - or are contemplating - rights issues."

Dominic said in the next six to nine months we are likely to see companies aiming to maximise liquidity to ensure that they keep within their banking covenants. This will may result in further restructuring in the sector.

(GK/JM)