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Construction Products Association forecasts fall in UK construction activity

World Cement,

The UK’s Construction Products Association (CPA) has released its latest forecasts for the country’s construction industry. The CPA predicts that construction activity will decline by 6.3% in 2012 and a further 1.4% in 2013. This fall in output would result in an £8.5 billion loss of construction activity over the two-year period, thereby reducing the construction industry’s ability to stimulate economic recovery in the UK. However, a return to growth is expected in 2014. Private sector construction work is forecast to drop 4% in 2012, but then rise by 15% between 2012 and 2016, while public sector work is set to fall by 19% between 2010 and 2014. Both rail and energy construction are expected to increase over the coming years.

“Construction is currently experiencing sharp falls, both for orders and output as a result of severe cuts in the government’s capital spending, coupled with a very subdued private sector recovery. Construction has already lost £4.5 billion of work this year as the industry returned to recession for the third time in five years. Prospects for the industry going forward are bleak,” stated CPA Economics Director Noble Francis.

“Although growth is expected in 2014, the next 12 – 18 months are likely to cause considerable pain to an industry that is already reeling from a prolonged decline. Considering how important construction is to the economy as a whole, and how many times government has stated that construction is essential for recovery, these latest forecasts will do nothing to improve confidence in the UK economy,” added Francis.

In its statement, the CPA urges the government to switch to capital investment for essential housing and infrastructure, as well as encourage private investment in the construction sector.

Adapted from press release by Louise Fordham.

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