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Construction industry forecast 2011-2015

2011 has seen a published a report on construction industry forecast for the next five years by the Construction Product Association.

According to the report it is anticipated that despite the construction industry growth in 2010 a fall in construction output of 0.8% in 2011 is forecast, followed by a further 2% in 2012. The main reason for that is the public sector spending cuts announced in the Comprehensive Spending Review (CSR). More positive is the forecast for the following years with percentage of growth of 0.5, 2.3 and 3.9 respectively for 2013, 2014 and 2015.

One of the highlights in the report, regarding the private housing sector, is that house building levels recovered in 2010, from 2009’s historical low. Some schemes announced in Budget 2011, have encouraged the house building sector, although consumer confidence has decreased throughout the course of 2011. A reduction in demand for mortgages has been caused by inflation and unemployment rates even before cuts to public sector spending have had a full effect.

Growth is expected to continue in private housing repair, maintenance and improvement during 2011 and 2012. From the end of 2012, the Green Deal hopes to enhance the output further by incentivising homeowners to take loans to invest in energy saving improvements to their home.

Construction in the public sector could be severely affected by the public sector funding cuts expecting falls on an annual basis through 2015. However that low point is expected to be reached in 2015 will be equivalent to the output in 2007.

Slow recovery in the commercial sector is anticipated every year until 2015. The same will happen with infrastructure, which is set to grow by an average of 2% per year. However, the nuclear programme is set to boost output growth by the end of the forecast period.

The outlook for the industrial sector remains positive due to economic expansion, manufacturing recovery and prosperous exports. The actual forecast for the industrial sector’s output is that it will grow by 10% in 2011, 7% in 2012 and an average of 4% per annum thereafter.

NOTE - These are general discussion articles only.