The construction sector is to grow by 10% and contribute nearly £11 billion to the UK economy over the next two years, according to the Construction Products Association (CPA).
The CPA’s Summer Forecast highlights construction output will grow 4.7% in 2014 and 4.8% in 2015, with total output to rise 22.2% over the next five years.
Private housing starts are expected to grow 18.0% in 2014 and 10.0% in 2015. Commercial offices output is predicted to grow 10.0% in 2014 and 8.0% in 2015.
The forecasts reflect the increasing strength of the sector, according to Dr Noble Francis, economics director of the CPA, but warned that risks remain.
Francis said: “We anticipate the recovery will continue through the forecast horizon in 2018 and broaden both across sectors and regions. Overall levels of activity will likely match their 2007 peak in 2017.
“In the short-term, the activity will primarily be led by private housing, infrastructure and commercial. Notably, in the long-term, we expect this activity will be boosted by work on schools and hospitals.”
Dr Francis concluded: “This represents the Association’s central forecast but there are risks on both the upside and downside. Forecasts continue to be revised up as the UK economy rebalances away from consumer spending and services towards manufacturing. Greater than expected UK economic growth could stimulate even more private sector construction.
“Conversely, concerns regarding house price inflation may lead to the imposition of lending constraints. This, combined with interest rate rises, may have an adverse impact upon effective demand, and consequently, house building.”