The construction industry will grow by about 10% and contribute nearly £11Bn to the UK economy over the next two years according to the Construction Products Association’s latest Summer Forecasts.
The association predicts that construction output will increase 4.7% in 2014 and 4.8% in 2015, while total construction output is set to rise 22.2% over the next five years. Forecasts suggest that activity in the sector will be led by private housing, infrastructure and commercial in the short term.
Commercial, it is predicted, will have the greatest influence on the overall outlook for the construction industry and should contribute 23.4% growth over the forecast horizon to 2018. The association said the offices sub sector is the primary driver in commercial with output forecasted to grow by 10% in 2014 and 8% in 2015.
The association also anticipates a rise in private housing starts of 18.0% in 2014 and 10.0% in 2015, with infrastructure output across all key sub sectors set to increase by 9.2% in 2014 and 7.0% in 2015.
Economics Director of the Association Dr Noble Francis said: “The private housing sector continues to benefit from the improving economic backdrop and government policy measures.
“The pending general election, however, will cast the future of housing policies into doubt,” he added.
Longer term, the association said growth could be boosted by construction work on schools and hospitals.
Dr Francis said: “The Forecasts reflect the increasing strength of the sector, though risks remain. We anticipate the recovery will continue through the forecast horizon in 2018 and broaden both across sectors and regions.
But, he continued: “Concerns regarding house price inflation may lead to the imposition of lending constraints. This, combined with interest rate rises, may have an adverse impact upon effective demand, and consequently, house building.”
Photo Licence: https://creativecommons.org/licenses/by-sa/2.0/
