The Construction Products Association (CPA) has predicted that construction activity will be largely flat for the next two years, with growth in infrastructure and education offsetting falls in activity in commercial offices and industrial factories, among others.
Noting uncertainty following the EU referendum, the CPA urged the Chancellor to focus on reducing uncertainty for the private sector in the forthcoming Autumn Statement, sustaining the housing sector and ensuring delivery of education construction and major infrastructure projects already in the pipeline, such as HS2, Hinkley Point and the Thames Tideway Tunnel.
“Surveys across the industry highlight that activity in the construction sector has been sustained post-referendum, primarily based upon work on projects that were signed in the 12-18 months before the referendum,” said Noble Francis, Economics Director. “Looking forward, projects in the pipeline mean that construction activity is likely to continue throughout the rest of 2016 and the first half of 2017.
“From the second half of 2017, however, there is likely to be a clear division between the fortunes of privately-funded construction sectors – such as commercial offices and industrial factories – where the current uncertainty is likely to have a major impact, and those that are largely unaffected by post-referendum uncertainty – such as infrastructure and education – which are either publicly-funded or in regulated sectors.”
Key results from the latest CPA construction forecasts include:
- Construction output to rise 0.6% in 2016, 0.3% in 2017 & 0.2% in 2018
- Offices construction to increase 8.0% in 2016 before a decline of 3.0% in 2017 and 10.0% in 2018
- Factories construction to fall 5.0% in 2016 and 2.0% in 2017
- Infrastructure work to rise by 6.2% in 2017 and 10.2% in 2018
- Private housing starts to rise 2.0% but remain flat in 2017 and fall 2.0% in 2018
- Retail construction to fall 8.0% in 2016 before falls of 4.0% in 2017 and 2.0% in 2018