Member Article

Construction growth not set to return “until 2014?

More bad news for the Construction Industry, as new figures show that growth is unlikely to return to the sector until 2014.

According to research by the Construction Products Association, the sector has lost more than £32billion of construction activity since the beginning of the economic downturn in 2007.

Commercial and housing sectors continue to perform badly, with output expected to fall by 1% this year, 3.6% next year and no growth in 2013.

Michael Ankers, chief executive of the Construction Products Organisation is now calling on the government to do more to kick-start the economic recovery.

He said: “Although the government is committed to cut capital expenditure by 20% over the next 4 years, the hoped for robust recovery to compensate for these cuts is not materialising.

“Despite the government’s desire to support housing recovery, housing starts in 2012 will be the second lowest year since 1945.”

While public sector housing is slowly recovering, public sector home construction is set to fall, leaving the UK with a shortfall of more than 2 million homes.

There is also little activity in the commercial construction sector, which is expected to fall by 3% in 2011 before a return to growth in 2013.

However there is some good news for infrastructure.

“On a more positive note, infrastructure output is set to grow throughout the forecast period, driven by considerable increases in rail and energy related work, even though road expenditure continues to decline.

“During this period rail infrastructure will see growth by almost 80% and construction of energy related projects by a massive 200%.”

Mr Ankers also called on the government to do more to support house building and the Green Deal Programme, both of which are necessary to UK prosperity.

He concluded: “Government recognises that construction is a key part of economic recovery, yet these forecasts herald a very difficult few years, not just for construction but for the wider economy.

“It is therefore essential that the government uses the Autumn statement to stimulate recovery by rebalancing the economy between current and capital spending.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .