8 February 2008

Aggregates Sales Up 3% in 2007 but Asphalt Markets Remain Depressed

Aggregates, asphalt and ready mixed concrete sales volumes all increased in the fourth quarter of 2007, compared with the same period of 2006, according to the results of the latest QPA market survey. Crushed rock volumes grew by 6%, sand and gravel by 2%, ready mixed concrete by 3% and asphalt by 3%.

For the whole of 2007, the crushed rock increase of 5% and sand and gravel increase of 1% produced an overall 3% improvement in aggregates sales volumes. Crushed rock sales were boosted by a number of large and exceptional fill contracts which took place during the year. Ready mixed concrete growth for the year was 2%, confirming the continued growth of construction activity in 2007. Asphalt volumes were flat in 2007 due to some recovery in the second half of the year - although this second half performance compared with a very poor second half of 2006. The context of asphalt sales in 2007 is that the market remains at a historic low level of 25.7 million tonnes. The last year when asphalt demand was lower than 25.7 million tonnes was 1986.

Commenting on the results, QPA Director General Simon van der Byl said "private sector construction growth was the main driver of aggregates and concrete volume growth in 2007, but looking ahead the predicted slow down in construction growth in 2008 will constrain markets this year in spite of the positive trend of infrastructure work and progress on the Olympics.

A particular concern is the continuing lack of growth in asphalt sales, now at the lowest level for 20 years. The primary reason for this is a long term lack of investment in national and local roads. Local authorities, for example, simply have inadequate resources to maintain and improve the condition of local roads and deal with other front line local services. This is not a sustainable situation, but central government appears to have washed its hands of responsibility. There is something perverse about the decision making processes in Government which have led to the service most widely used by local residents - roads and pavements - becoming the Cinderella service in terms of funding."

For a table with a full list of figures, click here.

ENDS

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