Slowdown averted despite 2005 drop, RICS claims

It said that the fourth quarter of 2005 saw workloads grow at the same pace as the previous quarter. This stability was put down to a resurgence in commercial and industrial building activity. The findings suggest the UK has halted a mild slowdown in economic growth witnessed during 2005.

New figures from the Construction Products Association (CPA) said the mild slowdown amounted to a reduction in output last year of 1%, which had brought to standstill the ongoing boom in the construction economy since the mid 1990s.

However, in line with the rosier view of the RICS, it predicted a gradual recovery this year and further gains in 2007 and 2008. The figures married with an economic report recently released by consultant EC Harris, first revealed in QS News last month.

CPA chief executive Michael Ankers said construction was hit by higher energy and raw material costs, weaker private activity and a fall of around 3% in government investment in the built environment last year. But Ankers was at odds with RICS’ positive view of private sector clients, claiming that investment in the sector “continues to remain weak”.

“Below trend UK economic growth and an uncertain global economy are expected to remain constraints on business investment over the coming year, while poor consumer confidence and a sluggish housing market mean that 10,000 fewer private sector homes are likely to be built this year. At the same time, the home improvement market will remain depressed.”

Ankers predicted more substantial output in 2007 and 2008, at 3% per annum, as higher UK economic growth lifts private sector activity. The CPA also forecasted an uplift in the office market, a rise in social housing investment and more investment in industrial building work.