‘Growth reduced to 1%’

Construction output for the coming year is forecast to grow by a little more than 1% compared with the 2.6% enjoyed in 2007.

But the industry expects to avoid recession during the current economic slowdown, according to the latest forecasts from the Construction Products Association, even though this rate of growth is expected to remain at a modest 1% per annum all the way through to 2012.

Key forecast elements are:

• Housing starts are expected to fall to 205 000 in 2008, but recover to 235 000 by 2012.
• Output on commercial projects is expected to reach a peak in 2009 with output of £17.3 billion, but fall back to £15.5 billion by 2012.
• Output on infrastructure projects, which has declined sharply over the past decade, is expected to recover strongly over the next five years, with output increasing by more than 25% from just under £5 billion in 2007 to more than £6.5 billion in 2012.
• The repair and maintenance market is expected to remain subdued throughout the forecast period, with some recovery in the private sector after 2010, offset by falls in the programme of repair and improvement for social housing stock.
• Output on public sector projects is expected to grow by 2.8% per annum over the next five years, more than double the rate of growth in the private sector, which is forecast to grow at just 0.3% per annum.

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.

“Output growth is expected to remain at around 1% a year.”