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UK Construction growth to drop by 6%

Output in the UK construction industry is set to drop by nearly 6% over the next two years, before returning to growth in 2014.

According to the latest Construction Industry Forecasts published by the Construction Products Association, the decline is due to cuts in capital budgets, and a lack or private sector growth.

However, the survey did indicate that once recovery begins in 2014 there will be a rapid rise in activity with buoyant growth. Until then it is likely that construction will have a widely detrimental effect on the UK economy, despite the Government’s attempts to implement numerous building initiatives.

Commenting on these forecasts, Noble Francis, Economics Director of the Construction Products Association, said: “Between now and 2014, total construction is expected to lose £10 billion as public sector construction activity falls away sharply.

“Although this has been expected for some time following the government’s deficit reduction plan announcements, the hoped for recovery in the private sector, which was expected to offset these falls, has not materialised.

“Although the medium term prospects are more encouraging, if government is serious about lifting the economy out of recession quickly, it needs to ensure that it focuses clearly on public and private investment, rather than a series of announcements and initiatives that lead to very little activity.”

The report also indicated that construction output will fall by 4.5% in 2012 and 1.3% in 2013, while the Green Deal will have little effect on private housing repair, maintenance and improvement.

Despite the overall decline in the sector, rail construction is set to rise by 55% over the next 3 years, and energy construction will increase by 115% by 2016.

This was posted in Bdaily's Members' News section by Ruth Mitchell .