According to Summer Forecasts by the Construction Products Association (CPA) published today, the construction industry will grow by around 10% and contribute nearly £11 billion to the UK economy over the next two years.
The new CPA report predicts that construction output will grow by 4.7% in 2014 and 4.8% in 2015. Total construction output will rise by 22.2% over the next five years. Meanwhile, private housing starts are expected to grow 18.0% in 2014 and 10.0% in 2015. Commercial offices output is forecast to increase by 10.0% in 2014 and 8.0% in 2015.
CPA economics director, Dr Noble Francis, said: “The Forecasts reflect the increasing strength of the sector, though risks remain. We anticipate the recovery will continue through the forecast horizon in 2018 and broaden both across sectors and regions. Overall levels of activity will likely match their 2007 peak in 2017.”
He added: “In the short-term, the activity will primarily be led by private housing, infrastructure and commercial. Notably, in the long-term, we expect this activity will be boosted by work on schools and hospitals.
“The private housing sector continues to benefit from the improving economic backdrop and government policy measures, with housing starts expected to grow 18.0% in 2014 and 10.0% in 2015. The pending general election, however, will cast the future of housing policies into doubt. Such uncertainty, together with questions about affordability and higher mortgage repayment costs, will likely subdue private housing growth to 5.0% per year from 2016.
“Commercial, the largest sector, has a greater influence than housing on the overall outlook for the construction industry and should contribute 23.4% growth over the forecast horizon to 2018.”