Construction will decline for two years says CPA

Construction activity will continue to decline for at least the next two years, before any significant recovery returns in 2014.

That’s according to the latest Construction Industry Forecasts from the Construction Products Association.

Noble Francis, economics director said: “The industry is quite volatile at the moment, with some sectors enjoying increased activity, albeit from a very low base. However, despite some positive signs, the overall prospects for the next few years are very poor. Output for this year is expected to fall 0.5 per cent, followed by a greater fall of 2.8 per cent in 2012. In 2013 output will be broadly flat with just 0.2 per cent growth, before a return to some significant growth of 3.4 per cent in 2014.”

Private housing is expected to grow 62%, although the numbers being built will still be half what is needed to meet the number of new households created each year. Within this sector, private housing starts will rise 4% in 2011, yet by 2015 will still be 14% lower than 2007’s levels. Public housing starts are expected to fall 39% in the next three years

Retail construction will rise 4% in 2011 due to supermarket expansion and office construction will grow over 50% in the next five years driven by growth of high profile office space in London.

Roads construction is set to halve by 2014 with energy construction set to rise threefold by 2015.

Private housing repair, maintenance and improvement output to be flat in 2012 as consumers defer spending until the government’s Green Deal takes effect.

Francis says: “The government has indentified construction as a key driver to help boost economic recovery and for private sector work to replace public sector. Unfortunately, although the public work is now beginning to decline and will fall by 24% by 2014, there is little evidence that the private sector work will replace this over the next couple of years.”