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Mon June 21 2021

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Construction output expected to grow 4.5% in 2015

5 Aug 13 With house-builders leading the way, civil engineering contractors will soon also be experiencing economic recovery, according to the latest forecasts from the Construction Products Association.

Infrastructure work is set to grow
Infrastructure work is set to grow

Overall, construction output will fall 1.5% this year, and then grow by 2.2% in 2014 and by 4.5% in 2015, the CPA predicts.

Recovery will be led primarily by private housing in the short-term, with infrastructure expected to further boost activity in the medium-term.

CPA economics director Noble Francis, of the Construction Products Association, said: “The industry has suffered greatly over the past five years and earlier this year saw its lowest levels since 2001. Even with growth in the second half of this year, output is set to fall 1.5% for 2013. However, our forecast is for construction to recover from 2014. Growth over the next 12 to 18 months is predominantly due to a surge in housing sector activity, which is benefitting from the Help to Buy scheme. 

“Help to Buy has clearly stimulated demand and led to increasing supply from housebuilders. We forecast housing starts will rise 39% by 2015.”

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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.

Rail infrastructure output is forecast to rise 41% by 2016; energy infrastructure should rise 89% by 2017. These forecasts depend, however, on the government being able to deliver on its policy promises.

Dr Francis continued: “Recent housing policies have proved that when government announcements are followed through, the result is immediate and significant.  Help to Buy Part 2 would be expected to make an even wider and more significant contribution through its support for the secondary housing market. Should the government do the same in other parts of construction then this industry will further support the wider economic recovery.”

CPA forecasts: key points

  • 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

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