Construction ouput at 30-year low

Construction output is facing its biggest fall in nearly 30 years, according to new figures out today.

Trade body the Construction Products Association (CPA) said industry output was likely to fall by 9% this year and a further 4% in 2010. This would be the biggest drop since the early 1980s, it said.

Private housing starts, which fell 43% in 2008, are expected to fall another 32% in 2009 and commercial work will continue to suffer as the retail industry scales back development plans, it said.

Other predictions for 2009 include a 10% fall in new construction work and a 15% fall in private housing repair, maintenance and improvement.

The CPA said overall output would not begin to increase until the second half of 2010 and there would be no recovery in total output until 2012.

But the association said construction output was likely to increase in some areas linked to public spending, including education and infrastructure. Public non-housing construction is expected to rise 22% in the next two years and rail construction work by 190% over the next five years.

CPA chief executive Michael Ankers said: “The key message from these forecasts is that the construction industry is heavily reliant on public sector spending to sustain even these reduced levels of activity.

“Without the anticipated increase in public sector programmes, the industry would be faced with a 15% fall in output over the next two years – the kind of reversal that the industry has not experienced in more than 60 years.

“We are still concerned, however, that the political rhetoric is not being matched by efficient delivery of these projects on the ground. The government’s priority at this time must be to improve credit availability and the mechanisms for delivering public sector projects.”