However, the Construction Regions study, by forecaster Martin Hewes, highlights vast regional differences in the growth rate, with London leading the way while growth in Scotland and North-west England is tipped to slow considerably between 2000 and 2003.
Output in the capital is expected to rise 15.1% to £6.8bn between 2000 and 2003. It is followed by the North and Wales (both up 13.6%) and the East Midlands (12.1%).
In contrast, Scottish output will only increase 1.2% to £4.1bn during the same period and growth in the North-west is predicted at just 1.5%.
After output growth that reached 32% between 1996 and 2000, London's 15% growth from 2000 to 2003 is slower than in previous years, but remains strong.
Government spending on public non-housing and infrastructure would boost output across the UK, the report says. This is despite a predicted fall in output from sectors such as commercial and private housing.
The London office market, which accounts for more than 60% of commercial work, will slow despite continued demand for office space. Hewes said this was because more office space was available, having risen from 4.9 million ft2 to 7.3 million ft2.
He added that although output would be greater in 2003 than in 2000, the growth would be more modest compared with the years from 1996 to 1999.
He said: "The rate of growth is not going to match that of around 1998 and 1999, mainly because it cannot keep going that fast forever. But the outlook is still reasonably rosy."
The study backs up other reports that have suggested the boom times are coming to an end, to be replaced by less spectacular, but sustainable, growth.
Growth is not going to match that of 1998, as it cannot keep going that fast forever
Forecaster Martin Hewes
The effects of a US slowdown are also expected to affect confidence and profit in the commercial sector, leading to office closures and company mergers. Any slowdown in the UK would also force developers to take a more cautious approach.
Hewes said: "We are of the view that there will be a slowing down of economic activity and this will affect the office market in London."
Offsetting this is an expected increase in public housing in the capital, with more funding earmarked for the sector and some big developments planned.
In the North, output is predicted to fall next year before bouncing back strongly on the back of increased government spending to reach £1.9bn by 2003.
Welsh output is forecast to reach £1.8bn in 2003, with the private housing market driving the recovery.
The study said increased output in the East Midlands, up to £2.8bn in 2003, would be largely down to infrastructure and public housing spending increases.
Scotland's output growth is set to stay at a higher level this year, before sliding to just 1.2% by 2003.
But Hewes was upbeat about Scotland's growth rate: "Even though growth will not grow that much in 2003, output will still be higher than it was in 1996." Scottish output is forecast to be £4.1bn in 2003, up from £3.1bn in 1996.
Postscript
The report is available from Hewes & Associates on 01428-641518 or email hewesinfo@aol.com
