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Construction output to fall for next two years

Construction output is set to fall again in both 2011 and 2012 according to the latest forecasts from the Construction Products Association.
The Association is forecasting that output will fall by just under 1% in 2011 and by a further 2% in 2012 as recovery in private sector construction fails to match the sharp downturn in public sector spending.

CPA chief executive Michael Ankers said: “It is especially worrying that the construction industry is going to face another two years of falls in output, particularly given it is an industry that has been identified in the government’s Growth Plan as having a key part to play in the economic recovery. Significant cuts in public spending are inevitable whilst the private sector remains cautious about the pace of the wider economic recovery and consumer confidence remains at low levels.

“We welcome the steps that the government is taking to stimulate private sector growth but we do not see these in the short term as being sufficient to outweigh the public sector cuts. Availability of finance remains an issue for many companies and the housing market is still being held back by the lack of finance available, particularly for first time buyers. Accounting as it does for nearly 10% of GDP, the industry undoubtedly does have a key role to play in rebalancing the economy and leading the economic recovery.”

Ankers believes the government needs to:

  • Continue to put pressure on the leading institutions to make finance available for house purchase and ensure that the range of initiatives introduced in the recent Budget actually work

  • Make sure that planning authorities around the country adhere to the requirement to make a presumption in favour of sustainable development

  • Ensure that the localism agenda acts as a stimulus for growth in local communities and does not create a ‘nimby’s charter’

  • Try to accelerate the programme for investment in energy supply so that companies have an increased confidence about investing in the UK

  • Introduce incentives to encourage householders to invest in the energy efficiency of their homes in advance of the Green Deal policy being introduced at the end of next year.’
  • About Fiona Russell-Horne

    Fiona Russell-Horne
    Group Managing Editor across the BMJ portfolio.

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