Construction Products Association forecasts growth of 19% across industry through to 2017, with 拢20bn added to overall UK output

useful

The construction industry anticipated to grow by 19% through to 2017, with the industry鈥檚 growth driven by private housing and infrastructure, the Construction Products Association (CPA) has forecast.

The CPA said the forecast growth, which is an upwards revision from the summer, would add 拢20bn to the UK鈥檚 output.

Key points in the Forecasts include:

  • Construction output growth of 2.7% in 2014 and 4.6% in 2015
  • Private housing starts to rise 19.0% in 2013 and 15.0% in 2014
  • Public education to fall 14.0% this year
  • Rail infrastructure to rise 34.0% by 2017
  • Energy infrastructure to rise 99.0% by 2017
  • Public sector education and health projects to fall 11.0% in 2013 and 2.4% in 2014

Noble Francis, CPA economics director, said: 鈥淐onstruction is set to enjoy growth over the next four years as it recovers from its worst recession in over 35 years.

鈥淭his is mainly due to private housing, which is experiencing a rapid rise, and infrastructure, which is seeing a more gradual return to positive territory.

鈥淭he private housing sector is being driven by recovery in the wider economy and the impacts of policies including Help to Buy, which have driven both house prices and house building.

鈥淭his is expected to lead to private house starts increasing 19.0% in 2013 and 15.0% in 2014, albeit from historic low levels of house building.

鈥淎lthough rapid growth is predicted over the next 18 months, uncertainty remains around what will happen when the policies end, given that the housing market is unlikely to be self-sustaining by then.

鈥淭he infrastructure sector is recovering from a very difficult 2012, when output fell 12.7% despite numerous government announcements of 鈥榖oosts鈥� to the sector.

鈥淕overnment now appears, however, to be refocusing capital investment towards repairs and renewals.

鈥淚n addition, work on Europe鈥檚 largest construction project, Crossrail, is expected to peak over the next 18 months. As a result, growth of 7.4% is forecast in 2014.

鈥淚n the longer-term, the prospects for infrastructure will be reliant upon investment in the replacement of energy capacity across nuclear, offshore wind, gas and shale, all of which remain uncertain.

鈥淒riven by this investment, we predict the sector will enjoy further growth of 27.9% between 2015 and 2017.

鈥淭wo other sectors figure prominently in our forecasts. First, work in the largest sector of commercial (offices and retail) remains one-third lower than its high in 2007.

鈥淪econd, public sector construction, which accounts for one-third of total industry output, continues to constrain overall growth.鈥�

鈥淎fter suffering from an extremely tough market for over five years, and acting as a drag on UK economic activity, construction is set to grow every year between 2014 and 2017.

鈥淭his should provide a considerable boost to the wider economy.鈥�

 

Topics