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Sat October 31 2020

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Construction recovery delayed until 2013, says CPA

6 Dec 10 The Construction Products Association has issued a grim prediction that there will be no growth in construction output until 2013. Public spending cuts will mean that recovery in construction output experienced by the industry during much of 2010 will stall in 2011, the organisation predicts.

The CPA’s latest forecasts indicate that industry output will decline by 2% in 2011, and fall further in 2012.

CPA chief executive Michael Ankers said: “The government has rightly focused on the private sector playing a leading role in driving the UK’s economic recovery. Unfortunately, we do not expect the increase in private sector investment in construction over the next two years to compensate for the sharp falls in public sector investment. Although private sector construction is forecast to grow by 5% during the next two years, construction work from the public sector is expected to fall by 17%.

“By 2013, however, we expect to see strong growth in the commercial sector, combined with increasing construction activity related to housing, rail schemes and the development of energy infrastructure, leading to a recovery in construction output at the end of our forecast period.

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“The government has acknowledged the importance of the construction industry to the economy, accounting as it does for 8% of GDP and employing 2.5 million people, by highlighting it as one of the six sectors for initial government action in its Growth Review published at the end of November. The increase in construction output in 2010 has been an important component of the growth in GDP over the last two quarters. Unfortunately, these latest forecasts show that construction is unlikely to provide the same impetus over the next two years and this will almost certainly slow down the rate of growth in the wider economy.”

Key points of the CPA forecast include:

  • Private housing starts to grow 5% in both 2011 and 2012
  • Public sector construction expected to fall 9% in both in 2011 and 2012
  • Commercial sector to rise 20% between 2009 and 2015
  • Rail construction anticipated to double by 2015 despite £1 billion saving on Crossrail
  • Energy construction expected to treble by 2015 due to nuclear and renewables work 

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