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Brace yourself for a rough 2012

4 Jul 11 Latest forecast from the Construction Products Association suggests that this year is proving less bad than it previously feared but next year will be even worse.

Overall, prospects for construction over the next three years remain poor with no significant growth until 2014 and even by 2015 output will not have returned to pre-recession levels

The latest CPA forecast predicts a decline in construction output of 0.5% for 2011. At the start of the year it was forecasting a 2% decline for 2011. It then softened this to a 1% fall last month.

However, its previous forecast of a 2% decline in 2012 has now become a more pessimistic 2.8% decline.

For 2013 slight growth of 0.2% is forecasted, with private sector investment finally offsetting public sector falls, before a healthier rise of 3.4% in 2014 as recovery begins.

Growth drivers will be the energy sector and office building, particularly in London with the Shard, Broadgate, Pinnacle, and ‘Cheesegrater’ at 122 Leadenhall.

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Construction output in office building is expected to grow 50% over the next five years, while energy-related construction will grow three-fold by 2015, the CPA reckons, driven by nuclear and renewables.

Despite subdued economic activity and consumer spending, supermarkets continue to thrive and expansion programmes by all the major chains are expected to raise retail construction which in 2015 is set to be almost one third higher than in 2009.

Output in the private housing sector is forecast to rise by 62% by 2013 but this is from a very low base and is likely to still be below pre-recession levels come 2015.

On the downside, road construction will halve and public housing orders will fall 39% in the next three years. Public spending cuts will also hit construction in education and health. Education, including PFI construction, is expected to almost halve and health, including PFI, is expected to fall 36% over the next four years.

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