Michael Ankers: the only bright spot is the prospect of investment in infrastructure.

Prospects dwindle for construction sector

Published:  06 July, 2009

UK: The outlook for the construction industry has deteriorated sharply over the last three months. 

Construction Products Association chief executive Michael Ankers said: “Although the private sector housing market has experienced some small improvement over the last few months, we are still only forecasting there will be 72 000 new houses built this year, the lowest figure since 1924 and over 20% below the number started in 2008.

“The sharpest falls in output are in the commercial and industrial sectors with investment in new office, retail and industrial building having come to an abrupt halt. Output on commercial work will have fallen by more than 40% in just two years.

According to the latest forecasts from the Construction Products Association, output will fall by 16% in 2009, compared with to the April forecast, which indicated a fall of 12%.

Prospects for 2010 have also declined, with the Association now forecasting a further fall of 5% compared to the previous forecast which showed a fall of 3.4%.

The CPA said it did not now expect any significant increase in construction output until 2012 and by the end of the forecast period in 2013 the industry will have recovered only to the levels of output achieved in 1999.

“The only bright spots for the industry are the continued investment by government in its education and health programmes and in the prospect of increased investment in infrastructure, particularly rail schemes,” said Mr Ankers.

“Without these, the industry would be in an even worse state. The real concern is that with the current state of the public finances, cuts in these government funded schemes are almost inevitable after the General Election and it is very doubtful that there will be any significant recovery in private sector investment to fill the gap.

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