Member Article

Construction output set to fall again

New forecasts show that output in the construction industry is set to fall by more than 5% next year, and will remain flat well into 2013, according to the Construction Products Association.

The research indicated that any signs of recovery will not appear until 2014, but will still be 12% lower than its peak in 2007.

Michael Ankers, chief executive of the Construction Products Association is now calling for a strong private sector recovery to help the industry return to growth.

He commented: Continuing uncertainty about the future of the euro zone and a lack of consumer confidence in the UK are holding back important investment decisions.

“As a result the largest area of construction activity - private commercial work- is forecast to fall by a further 5% in 2012 and remain at that level in 2013.”

Cuts in public sector constriction activity are also beginning to take effect, and it has also been predicted that work on schools, hospitals and non-housing work will fall by 23% on 2011 levels. Capital spending is also set to fall 30% by 2013.

Mr Ankers continued: “Although new housing starts in the private sector are set to continue their slow recovery, in the short term these are more than offset by the sharp fall in public sector housing.

“As a result the number of new homes started in 2012 is forecast to be 5000 fewer than this year, and at just 113,000 this is less than half the number of homes needed to accommodate the additional number of households expected to be created over the next 12 months.”

The forecast also showed that public sector construction will fall 18% between 2011 and 2014, while education and health projects will fall by 25% and 15% respectively in the next year.

By contrast, infrastructure construction will rise 20% by 2015, and energy construction output is set to triple over the next 3 years.

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