The construction industry will grow 23% by the end of 2018 and contribute £12 billion to the UK economy over the next two years alone, according to the latest Construction Products Association (CPA) autumn forecasts.
Construction output is forecast to grow 4.8% in 2014 and 5.3% in 2015.
Private housing starts are expected to grow 18% in 2014 and 10% in 2015, while the private commercial sector is set to increase by 3.7% in 2014 and 6.1% in 2015.
The CPA also forecasts roads construction will rise 46.1% by 2018 and energy infrastructure is anticipated to grow 118.2% by 2018.
However, the CPA warns that several risks remain, including the strength of the UK and Eurozone economies, the outcome of the 2015 general election and shortages of labour and materials.
Dr Noble Francis, economics director of the CPA, said: “Our Forecasts reflect a welcome, recurring theme as growth continues and begins to broaden. Short-term activity is still led by private housing, infrastructure and commercial, and areas of public sector construction are showing the first signs of increasing strength. We believe the expansion will continue through 2018.
“Recovery is not a foregone conclusion however, and several important risks remain, primarily around the strength of the UK and Eurozone economies, the policy outcomes following the 2015 General Election and the impact of any supply constraints such as the scarcity of labour and materials.”
Dr Francis concluded: “The Association’s central forecast estimates that construction output will rise 4.8% in 2014, a marginal change from the previous 4.7% estimate. Output is forecast to rise a further 5.3% in 2015, an upward revision from 4.8% growth in the Association’s Summer Forecast due to the continued strength of the UK economy.”