Construction Industry Set To Grow
The construction industry is set to grow by 3.4% this year and 5.2% next year the latest forecast from the Construction Products Association (CPA) has found.
The CPA forecast anticipates that growth in private house building, infrastructure work and commercial activity are set to drive recovery in the industry over the next four years.
The CPA forecasts growth of 3.4% in 2014 and by a further 5.2% in 2015, well up on the 2.7% and 4.6% forecast just three months ago.
The CPA projects growth to continue throughout the forecast period to 2017, with increases of 4.4% in 2016 and 3.8% in 2017.
This comes after a 7.5% fall in construction output in 2011 and what the CPA estimates to be a 1% rise in 2012.
However, the CPA warns that despite the positive outlook over the next four years “considerable uncertainties remain regarding the long-term sustainability of the recovery in the industry and wider economy in the latter years of this forecast post-2015”.
Noble Francis, CPA economics director, said the construction industry was “in a very different place” to a year ago when output fell to a level 15.4% below its pre-recession peak.
He said: “Since 2013 Q1, activity has picked up considerably. Initially this was due to a rapid expansion in house building but more recently growth in new infrastructure and a recovery in London commercial activity have supplemented further rises in private housing.
“Private housing has seen a rapid recovery, albeit from levels of house building that are half the number needed to meet the number of households created.
“This private housing growth has been driven by wider economic recovery and government’s Help to Buy policy.
“While initial concerns were that this policy would fuel house price inflation, but clearly both house prices and house building have risen significantly.
“After 2015, without Help to Buy to support housing market demand, there are strong concerns about whether house building will continue to improve despite the clear need for new housing.
“As a consequence, forecasts anticipate the growth in private housing starts slowing in 2016.”