The latest forecast from the Construction Products Association predicts no recession despite a slowdown in the sector.
The latest forecast says that construction output for the coming year is expected to grow by just over 1% compared with 2.6% in 2007. This rate of growth is expected to remain at a modest 1% per annum, all the way through to 2012.
Commenting on these latest forecasts, the association’s chief executive, Michael Ankers said: “The economic backdrop against which these forecasts have been prepared is more uncertain than for many years and there was a time when the construction industry was the first to suffer in such a situation.
“What we are seeing, however, is the fall in private housing – both new build and repair and maintenance – over the next couple of years, balanced by continued growth in the commercial sector on the back of major schemes that are already underway.
“The industry will also be supported by increasing government investment in its schools’ programme, a modest recovery in spending on infrastructure projects and the start of the major projects associated with the Olympic Games and the Stratford City Development. As a result, construction output is expected to grow by about 1% in both 2008 and 2009.”
However, he pointed out that any economic recovery in the housing market would be dependant on the Bank of England continuing to lower interest rates throughout 2008.