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CPA upwardly revises UK construction growth forecast

World Cement,

The Construction Products Association has released its latest forecast for the UK’s construction industry. Following an increase in activity, the forecast has been upwardly revised, with growth now estimated at 19% by 2017. In 2014, construction output is expected to increase by 2.7%, before rising by 4.6% in 2015.

The improvement is largely down to the infrastructure and private housing sectors. Rail and energy infrastructure are expected to experience growth of 34% and 99%, respectively, by 2017. Meanwhile, private housing starts are forecast to increase by 19% this year and 15% in 2014. This rise in house building has been attributed to government policies such as Help to Buy. However, Noble Francis, Economics Director of the Construction Products Association, points out that it is unclear what will happen when these policies come to an end.

Construction growth within the public education sector is forecast to decline by 14% in 2013, with public sector education and health projects dropping by 11% this year and 2.4% in 2014.

“The infrastructure sector is recovering from a very difficult 2012, when output fell 12.7% despite numerous government announcements of ‘boosts’ to the sector. Government now appears, however, to be refocusing capital investment towards repairs and renewals. In addition, work on Europe’s largest construction project, Crossrail, is expected to peak over the next 18 months. As a result, growth of 7.4% is forecast in 2014,” said Noble Francis.

“In the longer-term, the prospects for infrastructure will be reliant upon investment in the replacement of energy capacity across nuclear, offshore wind, gas and shale, all of which remain uncertain. Driven by this investment, we predict the sector will enjoy further growth of 27.9% between 2015 and 2017.

“Two other sectors figure prominently in our forecasts,” Francis continued. “First, work in the largest sector of commercial (offices and retail) remains one-third lower than its high in 2007. Second, public sector construction, which accounts for one-third of total industry output, continues to constrain overall growth.”

“After suffering from an extremely tough market for over five years, and acting as a drag on UK economic activity, construction is set to grow every year between 2014 and 2017. This should provide a considerable boost to the wider economy,” he concluded.

Adapted from press release by


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