Growth to rebound to 2.7% next year after flat 2018

Aaron Morby 11 months ago
Share

Construction output will stagnate this year before accelerating to 2.7% in 2019 and 1.9% in 2020 as major infrastructure projects gather speed.

Forecasters at the Construction Products Association say that infrastructure and private housing remain the only two bright spots this year amid a fall-off in commercial work hit by a 20% drop in office construction.

This will see overall industry growth flatline in 2018.

But next year civil engineering contractors will benefit from infrastructure output jumping 13.1% as work accelerates on large projects such as HS2, the Thames Tideway Tunnel and Hinkley Point C.

Spring CPA forecast

  • Construction output to remain flat in 2018 (0.1%) and rise 2.7% in 2019
  • Private housing starts to rise 2.0% in 2018 and 2019
  • Office construction to decline 20.0% in 2018 and 10.0% in 2019
  • Retail construction to fall 10.0% in 2018 but rise 5.0% in 2019
  • Infrastructure work to rise by 6.4% in 2018 and 13.1% in 2019

Noble Francis, economics director at the Construction Products Association, said: “The start of the year was a bad one for construction. Carillion, the UK’s second biggest contractor, went into liquidation in January and led to an hiatus on infrastructure and commercial projects.

“The snowy weather badly affected work on site for at least three working days in February and March and, as a result, 2018 Q1 construction is likely to be £1.5bn lower than in 2017 Q4.

“Half of the activity lost in Q1 is expected to be regained during 2018. Work on some Carillion projects has already restarted, on joint-ventures or where major clients such as Network Rail have been keen to continue work.

“Other projects will take time to retender but are still likely to restart this year. Large infrastructure projects should also allow for a catch-up after the adverse weather and often have penalty clauses for delays. Despite the sector’s strong growth prospects, questions remain about poor government delivery of major infrastructure projects.

“Private housing starts are expected to rise 2.0% in both 2018 and 2019 in spite of the slowdown in the general housing market as Help to Buy is clearly sustaining demand for new build homes. Outside London, house building will rise quicker than this but growth overall will be constrained by the ongoing fall in demand for high-end residential in the capital.

“The growth in infrastructure and private house building this year is forecast to offset falls in the hard hit commercial sector, where Brexit uncertainty continues to hit international investment in new office towers in London and high street woes affects the construction of new retail.”

Latest news

Competition probe launched into construction services

CMA says investigation into possible bid rigging is at a very early stage
2 days ago

Main construction work starts on 50-storey City tower

Lendlease breaks ground at 8 Bishopsgate ahead of three-year+ build programme
2 days ago

Morgan Sindall seals £1bn Essex council development deal

Brentwood Council housing delivery partnership follows Hertfordshire deal
2 days ago

Costain to start £125m Tyneside A19 upgrade

Work on bundled junction upgrades to start immediately
2 days ago

Eric Wright wins Pooley replacement bridge in Cumbria

New bridge to be first single span bridge of its type in the country
2 days ago

McGee clears vast west London site for HS2 crossover box

Costain/Skanska/Strabag JV to build 130m long Victoria Road box for HS2 railway
2 days ago

School wall collapse kills construction worker

Tragedy on school extension site in Bath
2 days ago

Subcontractors wanted for South Coast sites

Work opportunities up for grabs at Meet the Buyer event: Register now
3 days ago

Boost your online presence – join the Enquirer Directory

New site for suppliers and buyers showcases products, services and latest stories
11 months ago

Burst pipe causes flash flood at Battersea Power Station site

Video: Watch dramatic footage of water pouring through major London project
3 days ago

Wates trumpets record order book despite Brexit slowdown

9% fall in construction revenue offset by rise in residential and property services
3 days ago

Vinci wins £100m UCL East student blocks deal

Firm secures Olympic Park twin student buildings
3 days ago

Persimmon launches retention scheme for home buyers

New home owners can withhold cash until any build faults are sorted out
3 days ago

Griffiths to restart Dawnus £14m Swansea road job

Welsh civils firm to take on Kingsway city centre scheme
3 days ago

Hunt for £6bn Meridian Water phase 2 developer

Up to 250 affordable homes to be built in Meridian Two scheme
3 days ago

BBC construction skills blasted over EastEnders set woes

Lack of project management skills leads to £27m cost over-run and five-year delay
3 days ago

Kier slumps to £35.5m loss as problem contracts continue

Workloads wobbling in highways, utilities and housing maintenance markets
4 days ago

Go-ahead for £175m Cumbrian deep coal mine

Plans advance for Britain's first deep coal mine for 30 years
4 days ago

Hi Vis site wear launched for pregnant women

Clothing designed to make life safer and more comfortable "from bump to baby"
4 days ago

Speedy buys powered access hirer for £9.6m

Lifterz deal allows Speedy to offer nationwide powered access equipment hire
4 days ago

Build to rent specialist plans Bolton urban village

Placefirst to use in-house contractor for £27.5m scheme
4 days ago

Water winners revealed for £2bn Severn Trent spend

More contractors win first lots on AMP7 as client revamps working practices
4 days ago

Stranded Carillion chief takes helm at Kier

Andrew Davies named new Kier chief executive
5 days ago

Interserve £170m prison project to be rebid

Ministry of Justice confirms Glen Parva to be tendered as a publicly funded project
5 days ago

Cabinet Office promises Interserve subbies will get paid

Parliamentary Secretary makes pledge in House of Commons debate
5 days ago

Sir Robert McAlpine commercial director exits

Martin Pitt steps down from board after four years at group
5 days ago

Lakehouse subbies plan showdown with Sureserve bosses

Suppliers owed millions to demand answers at company AGM
5 days ago

Tolent to build first homes at £400m Leeds scheme

Builder gets foot in the door with prototype homes for Kirkstall Forge
5 days ago

Interserve subcontractors told it’s business as usual

Outsourcers circle Interserve support services division
6 days ago

Morgan Sindall wins 20-year Sellafield civils deal

Four teams named for Sellafield decommissioning project partnership
6 days ago

Contractor services