Construction output is forecast to increase 5.5% in 2015 according to the latest forecasts from the Construction Products Association, with infrastructure activity forecast to rise 7.6% in 2015, 9.2% in 2016 and 10.6% in 2017.
Dr Noble Francis, Economics Director at the CPA commented:
“Construction output is forecast to increase 5.5% in 2015, which is more than double the rate of growth for the UK economy, due to growth in the three key sectors of construction; private housing, commercial and infrastructure.”
“Over the following two years, however, construction output is forecast to be adversely affected by the UK’s most uncertain election in more than 40 years. The lag between construction contracts and work on the ground means that construction activity in 2015 probably won’t be impacted, since the majority of work for the year has already been planned. Instead, we expect a break in private and public investment this year for future projects, which in turn will lead to slower construction growth of 4.0% in 2016 and 3.4% in 2017.”
Dr. Francis described infrastructure activity as the one area expected to be largely unaffected by the election, which is anticipated to increase throughout the forecast period to 2018.
Strong growth of 7.6% this year is expected to accelerate to 9.2% in 2016 and 10.6% in 2017 owing to the £466 billion pipeline of work under the National Infrastructure Plan. This includes large projects such as the £1.5 billion A14 redevelopment, the £4.2 billion Thames Tideway Tunnel and, eventually, the £16 billion Hinkley Point C nuclear power station.”
“Overall,” Dr Francis concluded, “the Construction Products Association forecasts construction output surpassing the pre-recession peak next year, and expect output in 2018 to be 17.9% higher than in 2014. For this to materialise, however, industry will need to work together with the new government to address the need for greater investment in capacity and skills.”
The Construction Products Association represents the UK’s manufacturers and distributors of construction products and materials. The sector directly provides jobs for 300,000 people across 20,000 companies, has an annual turnover of more than £47 billion and accounts for over 1/3 of total construction output.
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