Construction output to fall further in 2013

Construction output is forecast to fall by more than 2% this year, according to the latest forecasts published today (January 14) by the Construction Products Association.
These figures come on top of the gloomy figures released on Friday by the ONS for construction output in November, show there was a 3.4% decline month on month and a 9.8% decline from the same period a year ago, with the industry having lost £8 billion of work in the past twelve months.

Noble Francis, CPA economics director 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 has not materialised 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 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.”

Key points in the Forecasts include:

  • Housing starts in 2013 forecast to be 122,000, which is fewer than half that needed to meet the number of new households

  • Activity in the commercial sector, the largest sector of construction, to fall 5.7% in 2013

  • Retail construction output to fall 10% in 2013

  • Output in education construction to fall 9.8% in 2013

  • Health construction output to fall 8.7% in 2013

  • Roads construction output to rise 8% in 2013 following 45% fall in 2012
  • About Fiona Russell-Horne

    Group Managing Editor across the BMJ portfolio.

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