Latest data indicates no improvement until 2012, with retail new building and offices badly hit

The outlook for the construction industry has deteriorated sharply over the last three months, according to the Construction Products Association (CPA).

According to its forecasts, output will fall by 16% in 2009, compared with the April forecast of 12%.

Prospects for 2010 have also declined and the CPA’s forecast of a 5% drop contrasts with 3.4% in April.

It does not expect any significant increase in construction output until 2012 and says the industry will only have recovered to the levels of output achieved in 1999 by 2013.

Michael Ankers, CPA chief executive, said: “The only bright spots for the industry are the continued investment by government in its education and health programmes and in the prospect of increased investment in infrastructure, particularly rail schemes. Without these the industry would be in an even worse state.

“The real concern is that with the current state of the public finances, cuts in these government funded schemes are almost inevitable after the election and it is very doubtful that there will be any significant recovery in private sector investment to fill the gap.”

Other findings:

  • Offices construction to fall by 50% in less than two years
  • Retail new build to fall by 42% by the end of 2010
  • Rail construction to increase almost threefold by 2013
  • Industrial construction in 2011 to be worth less than half its value in 2007.

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