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Gloom deepens for UK quarry firms
Issue date: October 30th, 2008
Further job losses and mothballing of operations could be necessary across UK quarrying firms as they prepare for worse conditions than during the 1991 recession, according to new figures.
The latest Quarry Products Association (QPA) sales statistics show ready-mix sales fell 21% during the third quarter compared with the same period last year, with sand and gravel sales falling by 17% and crushed rock by 15%.
As if suddenly hitting a wall, Q3 sales fell at a rate not seen since the 1991 downturn. However, warns the QPA, pre-credit crunch market conditions are set to make the effect of the slowdown much worse.
“The accelerating decline in demand seen in Q3 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,” it said.
The use of ready-mix and aggregates are often weighted towards the earlier stages of construction projects, says the QPA, and so the decline reflects 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.
Bucking the trend, asphalt sales have been steady through 2008. The figures show between January and September this year sales grew by one percent compared with the same period last year – Q3 figures, however, show a decline of two percent.
The QPA said it anticipates a “…significant decline in asphalt demand…given the small number of major roads contracts in progress and inadequate local highways funding”.
