Construction growth expected from 2014
Latest forecast from the Construction Products Association indicates recovery still 12 months away
CONSTRUCTION output is forecast to fall by more than 2% this year, according to the latest forecasts published this week by the Construction Products Association. The figures come on top of the sharp decline experienced in 2012, when the industry contracted by nearly 9%, and indicate that recovery in the sector is still 12 months away.
Noble Francis (pictured), economics director of the Construction Products Association, said: ‘Public sector construction work continues to bear the brunt of the Government’s austerity drive and has fallen by 15% over the last two years. Our forecasts show that it is expected to continue to fall by a further 7% this year.
‘Unfortunately, growth from the private sector, which government hoped would compensate for this decline in public sector activity, has not materialized and it too continues to contract.
‘With new orders for construction falling significantly at the end of last year, 2013 is going to be a difficult year for the construction industry with output forecast to fall by 2.2%. As the construction industry accounts for nearly 9% of GDP, this contraction will be a major constraint on growth in the wider economy over the year ahead,’ said Mr Francis.
However, despite these forecasts, there are some sectors of construction where growth is anticipated.
Private house building is expected to grow by 6% in 2013, boosted by the Bank of England’s Funding for Lending Scheme, while infrastructure investment, identified by government as essential for the recovery, is set to grow throughout the forecast period, due partly to Crossrail, the largest construction project in Europe, as well as critical investment in energy.
Moreover, investment earmarked by the Chancellor in his autumn statement for road maintenance should also provide some much-needed activity across all regions of the UK, although it is important that this work starts immediately and is used as a springboard for other economic activity if it is to have the desired impact.
