CPA: slow recovery ahead.

Construction industry faces another bleak year

Published:  11 January, 2010

UK: After an estimated fall of more than 12% in construction output in 2009 – the largest fall in a single year since records began in 1955 – the latest construction forecasts from the Construction Products Association predict a further decline of 3% in output this year, with the first tentative signs of recovery not expected until 2011.

When the recovery does come, it will do so slowly, with annual growth of less than 1% in each of the three years from 2011-2013.

Commenting on these latest forecasts, CPA chief executive Michael Ankers said; "Construction has been one of the sectors of the economy worst hit by the economic downturn, and while it is widely believed that the wider economy is now out of recession, the construction industry is going to have to wait for at least another 12 months.

"Output on office, retail, and other commercial projects has been particularly badly hit, and last year's fall of over 26% is expected to be followed by a further fall of 15% this year.

"At the same time, output on industrial projects, which has already fallen over 50% from its 2007 peak, is expected to fall still further during the next 12 months.

"On the positive side, new private housebuilding, which fell to levels not experienced since the 1920s, has started to recover with starts this year expected to be 15% higher than in 2009, and with similar levels of growth in each of the next three years.

"The major concern for the industry is public investment in construction where work on the major hospital and schools programmes has helped save the industry from even more dramatic falls in output.

"Looking ahead, the pre-Budget report confirmed that there would be sharp cuts in government capital spending over the next three years, and if these occur before there is any significant recovery in private sector construction, then there is a real danger that what we currently anticipate as being a three-year downturn will extend even further," Mr Ankers stated.

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