Construction output to decline until 2012

The UK construction industry will fall by 15% this year, followed by a combined fall of 5.2% for the next two years according to the latest forecast issued by construction industry marketing consultancy Leading Edge.

Construction output to decline until 2012

However, there are marked differences in the relative performance of individual sectors over the next four years. The new build commercial and industrial sectors are now being hit as hard in 2009 as housing was during 2008.

In 2009, Leading Edge forecasts that the industrial sector is going to be the worst hit with construction output down by 32%. Added to this, new housing and commercial output are both forecast to see significant falls. This will make the private sector a bleak place to be operating in during 2009.

However, the infrastructure sector will build on a strong performance in 2008, driven by the Government’s drive to pull spending forward to beat the recession. The public sector will also benefit from a continued increased spend in education and health and the fast-tracking of major projects.

Even though housing is forecast to return to growth in 2010, the fall in the public sector spending will cause total construction output to fall again next year, albeit by smaller amount than in 2009.

Even the normally recession resilient repair and maintenance market will continue to see falls in output between 2009-2011, although the damage will be less severe when compared to the ‘new build’ sectors.

The toll of the stalling housing, commercial and industrial markets and the impact of the credit crunch on property development will weigh heavily on building materials where sales are skewed towards these sectors. These materials include bricks, blocks and cement and we forecast, for example, brick sales to be down by almost 26% in 2009 from 2008’s decline in sales of 25%.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

Check Also

Covers branch

Covers donates £4,500 to homeless charity

The Chichester depot of Covers Timber & Builders Merchants has donated £4,500 to Stonepillow, helping …