Construction to rebound with four-year boom

Aaron Morby 4 years ago
Share

Construction will swing into a period of rapid and sustained growth over the next four years, according to leading economists.

house building

The latest forecast from the Construction Products Association anticipates the £111bn construction industry will enjoy a whopping 19% growth by 2017.

This equates to a £20bn expansion of activity over the four years with housing and energy and transport infrastructure leading the boom.

Economists have torn up previous forecasts to upwardly revise predictions after the housing industry kicked into gear over the summer.

Noble Francis, Economics Director of the CPA, said: “Construction is set to enjoy growth over the next four years as it recovers from its worst recession in over 35 years.

“This is mainly due to private housing, which is experiencing a rapid rise, and infrastructure, which is seeing a more gradual return to positive territory.”

Screen Shot 2013-10-18 at 12.41.15

Francis added: “The private housing sector is being driven by recovery in the wider economy and the impacts of policies including Help to Buy, which have driven both house prices and house building.

“This is expected to lead to private house starts increasing 19.0% in 2013 and 15.0% in 2014, albeit from historic low levels of house building.

“Although rapid growth is predicted over the next 18 months, uncertainty remains around what will happen when the policies end, given that the housing market is unlikely to be self-sustaining by then.”

He said that the infrastructure sector was also recovering from a very difficult 2012, when output fell 12.7% despite numerous government announcements of boosts to the sector.

“Government now appears, however, to be refocusing capital investment towards repairs and renewals.  In addition, work on Europe’s largest construction project, Crossrail, is expected to peak over the next 18 months.  As a result, growth of 7.4% is forecast in 2014.

“In the longer-term, the prospects for infrastructure will be reliant upon investment in the replacement of energy capacity across nuclear, offshore wind, gas and shale, all of which remain uncertain.  Driven by this investment, we predict the sector will enjoy further growth of 27.9% between 2015 and 2017.”

But some other key sectors will continue to struggle. Work in the largest sector of commercial (offices and retail) remains one-third lower than its high in 2007, while public sector construction, which accounts for one-third of total industry output, continues to constrain overall growth.

“After suffering from an extremely tough market for over five years, and acting as a drag on UK economic activity, construction is set to grow every year between 2014 and 2017.  This should provide a considerable boost to the wider economy,” said Francis.

Key points

  • Construction output growth of 2.7% in 2014 and 4.6% in 2015
  • Private housing starts to rise 19.0% in 2013 and 15.0% in 2014
  • Public education to fall 14.0% this year
  • Rail infrastructure to rise 34.0% by 2017
  • Energy infrastructure to rise 99.0% by 2017
  • Public sector education and health projects to fall 2.4% in 2014

Latest news

Hotel contract row forces Primus into CVA

Contractor set up by former Multiplex boss Martin Tidd faces cash flow crisis
2 hours ago

Manchester’s tallest building set for green light

Allied London's most ambitious scheme so far set for approval
4 hours ago

Morgan Sindall hunts top talent at virtual jobs fair

Construction & Infrastructure division takes careers event online to boost diversity
34 mins ago

Landmark VAT ruling on student rooms projects

Tax tribunal overturns HMRC’s VAT policy on student accommodation
3 hours ago

Grenfell cladding fire test verdict due next week

Government slashes estimate of residential blocks at risk from 600 to 208
2 hours ago

£100m East Riding prison gets green light

Category C jail to be built next to HMP Full Sutton, near York
2 hours ago

GSK scraps £350m Cumbria pharma plan

Pharma giant will invest extra £140m existing facility expansion
3 hours ago

Specialists land first trade packages at huge Berkeley site

Main construction starts on 88-acre Southall Waterside site
17 hours ago

Electrification plans scrapped on three major rail routes

Contracts worth millions axed as Government switches focus to new train technology
18 hours ago

Project delays dent Clugston results

Contractor confident about future prospects following a "challenging" year
22 hours ago

UK drags Skanska Europe into £40m loss

Skanska chief aims to cut operational costs and tighten risk management
1 day ago

McLaren set to bag £45m Lakeside extension

Contractor beats off McAlpine, ISG and Sisk to take Essex retail deal
1 day ago

Demand grows for immediate revamp of building regs

Local council chief attacks BRE, contractors and manufacturers for not sharing previous fire test results
1 day ago

Canary Wharf Contractors pays £11,000 tax on £70m profit

Company offsets £13.9m Corporation Tax bill against losses at other group divisions
1 day ago

Mount Anvil plans 1,000 flats in London Royal Docks

Deal with London ExCel centre paves way to build block of apartments
1 day ago

Consultant RLB stages mass raid on Mace managers

Five senior figures jump ship to join rival
2 days ago

Ministers reject client levy option in Farmer Review

Government backs most calls for reform but stops short of 0.5% charge on clients
2 days ago

Construction and fit out boost profits at Morgan Sindall

Contractor bucks recent sector trend by telling City to expect higher than predicted profits
2 days ago

Lendlease ordered to pay £14.8m for city tower falling glass

Cladding contractor to pick up bill after 15-foot glass pane fell from 17th floor
2 days ago

Civil engineers act to avert Grenfell-style disasters

ICE launches review of lessons from tower tragedy to avoid infrastructure failures
2 days ago

Man killed in derelict church collapse

Tragedy at Cardiff site where old church was being demolished
2 days ago

CH2M and BDP to lead revamp of Parliament

Firms to assess scale of work needed ahead of potential £4bn restoration
2 days ago

Wates southern boss joins Midas

Peter Whitmore charged with growing turnover in the south to £100m
2 days ago

Willmott Dixon wins £24m laser testing centre

Another major win for contractor at Harwell Science Campus
2 days ago

HS2 confirms shortlists for new stations

Design teams battle to win trio of stations as development partners fight for major Euston site
3 days ago

Willmott Dixon starts redundancy talks as divisions merge

Contractor confident most housing staff will be redeployed during merger into main construction arm
3 days ago

Tower crane drivers hold ballot over summer strikes

Unite warns of widespread project delays as dispute with HTC Wolffkran intensifies
3 days ago

Government confident Carillion JV will deliver HS2 deals

Rail chiefs seek guarantees from joint venture partners
4 days ago

Site start next month for £70m Broadgate revamp

Facelift for 1 Finsbury Square as tech firm Mimecast set to move in to financial hub
3 days ago

Torsion keeps growing on back of contract winning streak

Turnover set to hit £38m as staff numbers rise to 71
3 days ago

Contractor services