Private housing and commercial sector to drive growth in 2015
Published: 20 January, 2015
Total GB construction output volume (at constant 2011 prices) in 2015 is forecast to grow by 4.2% compared to 2014, with further growth of 3.7% in 2015, according to the construction research specialist Leading Edge.
Meanwhile, based on actual data for the first 10 months of 2014, the year is expected to end up with output at around £120.7bn at 2011 prices.
Mel Budd, managing director at Leading Edge, said: We had previously forecast good growth in 2014, although the size of the increase was higher than expected mainly due to the strong rise in housing output, which will end up with year-on-year growth of 20% plus for 2014.
Although private housing and the commercial sector are behind the peak levels of seven or eight years ago, they will still be the biggest drivers of growth in 2015 and beyond. The repair and maintenance sectors will also continue to see steady growth. Infrastructure remains a priority for the government as a key driver for the economy as there is a requirement to invest in expanding and upgrading utility and transport networks. Leading Edge believes that from 2016 onwards it will see bigger increases.
Mr Budd added: New orders showed a small increase in Q3 2014, although there were some big variations by sector. We saw decreases in public housing and industrial new orders; however, we expect industrial to bounce back fairly quickly in 2015. Industrial output has shown good growth in 2014 and is forecast to continue this in 2015. However, it is still well below the peak output levels reached in recent years.
Our analysis of regional performance shows that London and the South East accounted for around 36% of total GB output in 2014. These two are expected to continue to grow strongly although 2015 will see a better performance from the other regions.
Leading Edge forecasts that total construction output in 2018 will be 6% higher than the 2007 peak of £128,310m.