The Construction Products Association’s (CPA) latest forecast anticipates construction output growth of 2.2 per cent in 2014 and 4.5 per cent in 2015, led primarily by private housing in the short-term, with infrastructure expected to boost activity in the medium-term.
The findings come as the National Specialist Contractors Council (NSCC) reports that the specialist sector is facing a positive outlook, with 41 per cent of surveyed firms considering expanding over the next year.
Noble Francis, economics director of the CPA, commented: “Even with growth in the second half of this year, output is set to fall 1.5 per cent for 2013. However, our forecast is for construction to recover from 2014. Growth over the next 12-18 months is predominantly due to a surge in housing sector activity. Help to Buy has clearly stimulated demand and led to increasing supply from housebuilders. We forecast housing starts will rise 39% by 2015.”
In the medium-term, further growth should be provided by infrastructure activity, particularly from rail construction such as Crossrail, Europe’s largest project, and energy-related work including nuclear, offshore wind, and small renewables schemes.
Regional disparities are evident with London and the south east showing the strongest levels of activity owing to major contracts and refurbishment projects. Elsewhere, contractors are experiencing poor workloads.
The CPA forecasts reflect several key risks to the industry, most notably the dependency of the housing recovery on both a wider economic recovery and government support. Furthermore, infrastructure growth is dependent upon the government’s ability to ensure that its capital investment announcements translate into real activity on the ground.
Key points in the forecast include:
- Construction output to fall 1.5% in 2013 before 2.2% growth in 2014 and 4.5% in 2015
- Private housing starts to rise 15% in 2013 with average growth of 9% per year from 2014
- Factories construction to rise 42% by 2017 driven by manufacturing and export growth
- Rail infrastructure to rise 41% by 2016 driven by Crossrail and station refurbishments
- Energy infrastructure to rise 89% by 2017
- Public sector construction to fall 5.2% in 2013 after an 11.4% fall last year