Gloomy forecasts for the Construction Industry
Bad news for the construction sector, as new figures show that the industry is set to decline for at least the next two years, with only weak growth predicted in 2013.
This year output is expected to fall by 0.5%, followed by an even greater fall of 2.8 percent in 2012. Significant growth will only be seen in 2014, when significant growth of 3.4 percent is predicted.
While private housing is expected to grow by 62% over the forecast period, this increase will not be enough to counter the UK’s housing deficit. Until 2013, less than half the homes needed to meet the needs of new households will be built, and it is predicted that in five years there will be an additional housing gap of more than 600,000 homes.
While the government has identified construction as a key driver to boost the economic recovery, these predictions indicate that this process could be more difficult than the coalition anticipated
Commenting on the figures, Noble Francis, Economics Directors or the Construction Products Association said: “It is vital that government fully grasps the implications of these forecasts.
“If it wants private construction activity to plan a significant part in the recovery, then it must do more to help stimulate the industry, such as accelerating changes to the planning system, improving bank lending, reducing regulatory burdens and increasing the likely success of the Green Deal proposal, for instance by reducing VAT on Green Deal activity in line with the VAT charged on energy consumption.”
Other Construction Industry Forecasts show mixed results, with office, energy and retail construction set to rise, while road and public housing set to fall dramatically.
Dr Francis added: “it would also help if the government actually spend on construction what it proposes.”
This was posted in Bdaily's Members' News section by Ruth Mitchell .