Construction output forecast to fall 1% in 2005 after dip in public spending, lower private activity and poor consumer confidence.
The construction industry fell into recession last year. Output in 2005 is forecast to fall by 1%, according to a Construction Products Association survey, ending 11 years of uninterrupted growth.
The CPA said that the industry was hit by higher costs and a fall in government spending and private sector activity.
Construction Products Association chief executive Michael Ankers said: 鈥淚n 2005 the construction industry was hit by higher energy and raw material costs, weaker private sector activity and a fall of around 3% in government investment in the built environment.鈥�
The CPA said that construction output would increase by a modest 1% in 2006, largely due to a recovery in the public sector investment.
It said that private sector investment would remain weak, while poor consumer confidence would mean that 10,000 fewer private homes were likely to be built in 2006.
Ankers said: 鈥淲e expect to see more substantial growth in construction output during 2007 and 2008, at around 3% per annum, as higher UK economic growth lifts private sector activity and Government presses on with the delivery of its investment plans during the current Spending Review.鈥�
Other key points in the CPA鈥檚 forecast:
- Home improvement spending to fall in 2006 with private housing repair, maintenance and improvement output dropping 1%. Market is expected to recover by 3% per annum during 2007 and 2008 as consumer confidence returns.
