"Optimism in spite of increased costs, says CPA"
The increased cost of National Insurance contributions, employer insurance, taxes, labour and fuel have combined to increase the unit cost of building materials, report 59% of firms in the latest quarterly report of the Construction Products Association (CPA).
And 62% of firms report having raised the prices of their products in the UK market, a fifth of them by more than 5%, in spite of increased competition from abroad, although the current weakness of the pound might rectify that as imports become more expensive. It already seems to be boosting exports, according to the CPA survey.
Sales increased in the first quarter compared with the last quarter of 2002, although they were down on the first quarter of 2002.
Commenting on the Survey, Allan WilÈn, economics director of the CPA, says: "Encouragingly, and in contrast to many other parts of UK manufacturing, the response in our industry has been to increase capital expenditure, both to contain unit costs and to accommodate the anticipated rise in public sector funded construction activity.
"Product improvement and customer research remain priority areas over the next year, although a growing proportion of firms intend to spend more on plant and equipment in a move that can only improve productivity."