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Construction will shrink by a further 3% during 2010

27 Apr 10 The construction industry is forecast to shrink by a further 3% during 2010 following last year’s 12% fall, according to the Construction Products Association.

The construction industry is forecast to shrink by a further 3% during 2010 following last year’s 12% fall, according to the Construction Products Association.

This follows yesterday's bad news that construction had dipped back into recession, after two consecutive quarters of negative growth.

The Association does not expect growth to return to construction until 2011, and even then it is forecast to be relatively subdued at just 1% per year is 2011, 2012 and 2013.

The healthiest markets are likely to be private house building, where growth of 32% is expected between 2010 and 2012, and the regulated infrastructure sectors of rail, water and energy, which are predicted to grow 42%.

The industrial sector is forecast to grow 8% in 2011, and the commercial sector by 4%, following a 41% fall in output during 2009 and 2010.

Construction Products Association chief executive Michael Ankers said; “The construction industry is such a major part of the economy that it is hard to see how there can be a strong recovery whilst construction remains in recession. The benefit of construction to the economy is well documented - for every £1 spent on construction, the economy benefits by £2.84.

“So, despite the post election spending cuts, the next government must understand the long-term significance of its actions; if capital spending falls below 2.25% of GDP our public services will begin to deteriorate and economic recovery will be delayed.”
 

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