Two years of ‘bleak’ activity levels for construction

The construction industry faces a bleak two years thanks to public spending cuts and a decline in private sector building work according to a new report.

Forecasters Hewes & Associates said it was expecting to see a decline in construction industry output of 3.5% in 2011 and 5% in 2012.

It said that of the £8bn estimated growth in new work last year, almost 65% could be accounted for by the public sector and would be likely to suffer after the cuts announced in last year’s Comprehensive Spending Review.

Social housing is expected to decline from a forecast 28,000 in 2010 to 17,000 in 2012.