Industry not set to recover till 2011

Latest forecasts from the Construction Products Association suggest there will be no recovery in the industry until 2011.

Despite encouraging signs the housing market is beginning to recover, alongside indications the wider economy could be coming out of recession, the CPA said its forecasts showed construction output would fall 15% this year.

It added that it would continue to drop a further 2% in 2010, before starting a slow recovery from 2011.

Even with trend growth in the industry predicted for the years following 2011, the latest forecast suggests it will take until 2021 for construction output to reach the levels seen in 2007.

While the forecasts show private housing starts would continue to grow steadily, reaching 148,000 in 2013, commercial new work is expected to fall sharply, and by 2010, is expected to be less than half the size it was just two years earlier.

The CPA did note however, that it expected government spending on infrastructure to remain strong throughout the five-year forecast period, with commitments to the rail network and major investments in new energy supply. The sector is anticipated to reach an estimated £10bn in 2013.

Commenting on these latest forecasts, chief executive of the CPA Michael Ankers, said: “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.”

He added: “the association will continue its dialogue with the main political parties to ensure they recognise the construction industry is key to sustaining employment and bringing the economy out of recession.”