The Construction Products Association’s Summer Forecasts highlight that the construction industry will grow about 10 per cent and contribute nearly £11 billion to the UK economy over the next two years.
Key highlights of the CPA forecasts is that construction output is expected to grow 4.7 per cent in 2014 and 4.8 per cent in 2015; total construction output will rise 22.2 per cent over the next five years; private housing starts are expected to grow 18.0 per cent in 2014 and 10.0 per cent in 2015; and commercial offices output will grow 10 per cent in 2014 and 8 per cent in 2015.
Dr Noble Francis, economics director at the CPA, said: “The forecasts reflect the increasing strength of the sector, though risks remain. We anticipate the recovery will continue through the forecast horizon in 2018 and broaden both across sectors and regions. Overall levels of activity will likely match their 2007 peak in 2017.
“Commercial, the largest sector, has a greater influence than housing on the overall outlook for the construction industry and should contribute 23.4 per cent growth over the forecast horizon to 2018. Activity in regional markets is starting to pick up.
“There are risks on both the upside and downside. Forecasts continue to be revised up as the UK economy rebalances away from consumer spending and services towards manufacturing. Greater than expected UK economic growth could stimulate even more private sector construction.
“Conversely, concerns regarding house price inflation may lead to the imposition of lending constraints. This, combined with interest rate rises, may have an adverse impact upon effective demand, and consequently, house building.”