30 October 2008

Sharp Decline of Concrete and Aggregates Volumes in Third Quarter Confirms Depth of Construction Recession

Sales volume of aggregates and ready mixed concrete declined very sharply in the third quarter of 2008. Compared with the third quarter of 2007, sales volumes of ready mixed concrete fell by 21%, sand and gravel aggregates by 17%, crushed rock by 15% and asphalt by 2%.

The use of ready mixed concrete and aggregates are often weighted towards the earlier stages of construction projects, therefore the unprecedented declines reflect not just the problems in the housing markets, but also the lack of new work elsewhere in construction, notably in the commercial and industrial sectors.

The smaller fall in asphalt volumes is from a historically low level of demand, and reflects a tailing off of demand from major contracts and continuing funding shortages for local authority highways work.

The accelerating decline in demand seen in the third quarter indicates that for 2008 the rate of annual decline of aggregates and concrete volumes will be similar to the 1991 recession – but the fundamental difference in this comparison is that the early 1990s recession followed historically high volumes in the late 1980s, but the current market decline is from much more modest volume base.

There will be further significant declines in aggregates and concrete markets in 2009 as the downturn in construction output worsens, and a significant decline in asphalt demand is also anticipated given the small number of major roads contracts in progress and inadequate local highways funding.

For the charts showing the second quarter figures click here.

ENDS

If you need any more information, please contact our Press office or return to the News homepage