There is unlikely to be any real recovery in the construction industry before 2011, and it might be a further 10 years before output is back to 2007 levels.
That’s according to the Construction Products Association’s latest set of forecasts. Despite some encouraging signs that the wider economy may be coming out of recession and that the housing market is beginning to recover, the Association forecasts that construction output will fall 15% this year and a further 2% in 2010, before beginning a slow recovery from 2011.
Their latest forecast points out that, even with trend growth in the industry in the years after 2011, it could take until 2021 for construction output to reach the levels last enjoyed in 2007.
Chief executive Michael Ankers, says: “There are signs that the private housing market is beginning to pick up although the recovery is expected to be slow and from historically very low levels. However, even with this new optimism the total number of houses expected to be built in the two years 2009 and 2010 will only equal the number built in the year before the credit crunch.
“Government spending on construction projects in the short term remains strong and without this the industry would be in a far worse position. We remain very concerned that any significant cut-backs in capital spending after the Election will prolong the downturn.”
One bright spot for the industry is government spending on infrastructure, which the CPA believe will stay strong for the rest of the five year forecast period. This includes commitments to the rail network, a new five year programme for investment in water and, eventually, the start of major investments in new energy supply.