Construction to rebound with four-year boom

Aaron Morby 3 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

Balfour Beatty resurrects Kilpatrick name for new M&E arm

New £300m revenue M&E business formed from merger of engineering services into engineering construction operation
4 days ago

ISG starts £61m Imperial College White City fit-out

Firm will fit-out molecular sciences research hub being built by Laing O'Rourke
5 hours ago

Vast plan to rebuild Barking shopping centre

Vicarage Field shopping centre to be replaced by 850-home, retail and leisure scheme
7 hours ago

M20 bridge collapses after digger on lorry collision

Footbridge crashes on to vehicles causing Bank Holiday traffic chaos
2 days ago

Higgins wins £24m London housing project

More than 125 homes of mixed tenure will be built in Brent for Metropolitan housing association
7 hours ago

Balfour seals £35m deal on Perth transport project

Work will start in September on the first phase of the Perth Futures Transport Project
7 hours ago

Last chance to vote for the best in construction

10,000 votes already in for Enquirer awards. Top Ten winners to be revealed this week
7 hours ago

Construction director jailed for expenses fraud

Two-year sentence for "wildly overstating" figures in £275,000 swindle
7 hours ago

Business still booming for electrical contractors

ECA survey finds confidence high among 80% of firms despite Brexit vote
7 hours ago

Great Ormond Street starts talks for £190m phase 4

Trust aims to appoint main contractor and design team in the Spring
4 days ago

Galliford Try kicks-off London regen zone with £175m project

First major scheme in capital's Old Oak Common zone to start in the New Year
4 days ago

Speedy offloads large plant fleet for £14m

Ardent Hire snaps up troubled firm's excavator, dumper and road roller fleet
4 days ago

McAlpine wins £16m HQ for world’s biggest telescope

Work to start in December at University of Manchester’s Jodrell Bank site
4 days ago

Three in race for £33m Strathclyde Uni sports and health complex

Balfour, BAM and Morgan Sindall in hunt for University's next Glasgow building project
5 days ago

Essential Living goes modular for 23-storey PRS tower

Fast-tracked Creekside Wharf will be one of the country's tallest modular buildings
5 days ago

CITB warns apprenticeship levy to cut funding by 30%

Industry training board warns firms will be deterred from taking on apprentices
4 days ago

Brickbats fly over looming brick shortage fears

Row kicks off after estate agents blame house price rises on lack of brick supply
5 days ago

Betting Spy: Jeremy Corbyn can make us all money

Tories look a good thing at evens to win a majority at the next election
5 days ago

Bam Mott JV green light for £36m Hull flood defences

Bam Nuttall/Mott MacDonald JV to shore up defences along a 7.5km stretch of the river
5 days ago

Government to miss new homes target by over 250,000

The Treasury is rumoured to be finalising plans for a fresh housing stimulus
5 days ago

Kier starts £48m Cambridge tech firm HQ expansion

ARM HQ expansion at Peterhouse Technology Park gets underway
5 days ago

Tube maintenance taken away from Amey in bid to save £80m

Transport for London to take work back in-house on Jubilee, Northern and Piccadilly lines
6 days ago

Henry Boot bullish about post Brexit market

Developer and contractor sees no wobble in future work pipelines
5 days ago

Family Mosaic picks 17 firms for £500m build plan

Ardmore, Bouygues, Galliford Try and Willmott Dixon among preferred list
5 days ago

Immigration officers raid Liverpool Baltic Village site

Contractor W.I.S.E United faces fine of £20,000 for each worker if correct checks not carried out
5 days ago

Plans lodged for £150m Manchester PRS scheme

Work will start in Spring 2018, if planning is granted
5 days ago

Brookfield submits plan for 37-storey London city tower

Building work could start in summer 2018 after six-month demolition phase
6 days ago

Chinese cladding contractor facing HSE asbestos probe

Yuanda UK under spotlight over imported products
6 days ago

Carillion profit soars to £84m from support services

Blacklisting compensation to cost Carillion £10.5m
6 days ago

Just one week left to vote for best in construction

More than 10,000 votes in already for Enquirer awards: Book your places now
6 days ago

Contractor services