Construction output set to fall another 2% this year

This article was taken from The Construction Index website and can be read in full by clicking the link.

The Construction Products Association has revised its forecast for 2013 construction output to a 2% decline.

The CPA repeated its prediction that recovery for the construction industry would not begin until 2014 at the earliest.

Adding to the gloomy picture, figures released on Friday by the Office for National Statistics for construction output in November showed that there was a 3.4% decline month on month and a 9.8% decline from the same period a year ago, with the industry having lost £8bn of work in the preceding 12 months.Previous forecasts for 2103 from CPA economists had predicted a decrease in output of 1.3% or 1.4%. The downwards turn in the latest forecast makes it the CPA’s the gloomiest prediction yet and comes on the back of industry contraction of nearly 9% in 2012.

Commenting on these forecasts, CPA economics director Noble Francis said: “Public sector construction work continues to bear the brunt of the government’s austerity drive and has fallen by 15% over the last two years. Our forecasts show that it is expected to continue to fall by a further 7% this year.  Unfortunately, growth from the private sector, which government hoped would compensate for this decline in public sector activity, has not materialised and it too continues to contract.

“With new orders for construction falling significantly at the end of last year, 2013 is going to be a difficult year for the construction industry with output forecast to fall 2.2%.  As the construction industry accounts for nearly 9% of GDP this contraction will be a major constraint on growth in the wider economy over the year ahead.