Construction to rebound with four-year boom

Aaron Morby 6 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

Clugston files for administration

Hundreds of jobs at risk as financial crisis hits regional contractor
12 hours ago

London Resort reveals next generation theme park designs

Developer hopes to start construction in 2021
3 hours ago

Historic Liverpool building refurb now on third fit-out firm

Overbury brought in to replace Caddick who took job from Styles & Wood
4 hours ago

Green light for Birmingham’s tallest resi tower

Construction go-ahead for 51-storey skyscraper
4 hours ago

McLaren and Sisk hire regional directors from Kier

Andy Langley and Bruce Clarke take up key roles
4 hours ago

Oxford Science Park expansion approved

Major office and laboratory complex is set to be built in Oxford next autumn
4 hours ago

Giant property fund suspends dealing

Outflow of cash prompts move as investors flee sector
22 hours ago

Mace takes jump factory system to next level

Contractor launches Mace Tech business to transform high rise flats building
1 day ago

Winvic to build £57m Cardiff PRS tower

Winner confirmed for build to rent scheme as Grainger agrees funding deal
1 day ago

Creagh Concrete targets £200m turnover

Expanding concrete specialist looks to grow workforce to 1,000
1 day ago

Council fined £1.4m after falling bollard injures girl

Court hears how failings at council's highways deprtment left a six-year old with brain injuries
1 day ago

Consultation opens on ring-fencing retentions in Scotland

Specialist contractors call for action to protect retention payments
1 day ago

Vital Energi lands £7m M&E package from Berkeley Homes

Latest win for specialist at Royal Arsenal Riverside development
1 day ago

Willmott Dixon wins £39m university refurb job

London South Bank University awards contract for new learning hub
1 day ago

Edinburgh private rental scheme approved

Moda Living gets all clear on 139-flat Springside scheme
1 day ago

Plan for £100m landmark Portsmouth University project

13-storey academic building will rise to
2 days ago

Go-ahead for £500m Thames riverside fire station scheme

Developer U+I to start construction on major mixed use site in 2021
2 days ago

Just days left for deal to keep Midlands hospital restart on track

Government red tape over funding improvement targets holds up deal
2 days ago

Amey utilities and waste business up for sale

For sale sign hoisted over loss-making divisions employing around 6,000 staff
2 days ago

Skanska chalks up £23m Bristol secondary school job

Contractor has strong track record of school projects in the city
2 days ago

Nod for 350 flats plan at old Leicester City ground

Mix of rental and for sale flats to be built at former Foxes homes
3 days ago

Buyers report construction still in “contraction hole”

Speed of decline falls in November but political uncertainty casts shadow over industry
3 days ago

Boost your online presence – join the Enquirer Directory

Site for suppliers and buyers showcases products, services and latest stories
2 years ago

Heavy rain hits another major civils job

Galliford Try's £120m Lincoln Eastern Bypass turns into a quagmire
3 days ago

Sky plans major film studio complex at Elstree

Legal & General will develop and part-finance the 32-acre site in Hertfordshire
3 days ago

Chancellor pledges review of freelance tax changes

Review of planned IR35 changes could spare construction widespread disruption
3 days ago

ISG on board for £89m Cardiff bus interchange

Mixed use scheme is contractor's biggest win of the year
3 days ago

Atkins online plea to SMEs to help fix potholes

Consultant aims to reach more small firms by bypassing traditional procurement route
3 days ago

Plan for new 8,000-seat Edinburgh indoor arena

Arena scheme to include conference, retail, leisure and hotels
3 days ago

Lorne Stewart Engineering raids N G Bailey for CEO

Paul Briars returns to Lorne Stewart after 5 years as north west boss of Baileys
3 days ago

Contractor services