Output to fall faster than at any time since early 1980s
The construction industry is set for its biggest decline in almost 30 years.
Output is set to fall by nearly 9% in 2009 and a further 4% in 2010 according to the latest forecasts by the Construction Products Association (CPA).
This would be the biggest drop than at any time since the early 1980s.
Other key predictions for 2009 include a 10% drop in new construction work and a 15% fall in private housing repair, maintenance and improvement.
The Association said industry output would not begin to increase until the second half of 2010 and it does not expect a total recovery until 2012.
Recovery is expected to gather pace slowly as increasing private sector investment is offset by cut backs in public spending and the government tries to rebalance its books following the large increase in the borrowing requirement.
Michael Ankers, chief executive of the CPA, said: “The speed of decline is having a dramatic effect on many parts of the construction industry and is being driven by an unprecedented reduction in private sector investment resulting from the credit crunch and economic downturn.”
Private housing starts, which fell 43% in 2008, are expected to fall another 32% in 2009 to levels not seen since 1952.
Commercial work has collapsed as the retail sector cuts back and orders for new offices have fallen 47%.
According to Ankers, the only sectors where construction output is forecast to increase are linked to public spending.
“The Building Schools for the Future programme has finally got off the ground and spending on education projects is expected to grow by 28% over the next two years,” he said.
The CPA predicts that construction activity in the health sector will remain strong and also forecasts an increase in construction output on infrastructure projects.
Public non-housing construction is expected to rise 22% in the next two years.
Ankers said: “Without the anticipated increase in public sector programmes, the industry would be faced with a 15% fall in output over the next two years – the kind of reversal that the industry has not experienced in more than 60 years.
“We are still concerned, however, that the political rhetoric is not being matched by efficient delivery of these projects on the ground.
“The government’s priority at this time must be to improve credit availability and the mechanisms for delivering public sector projects.”
Electrical and Mechanical Contractor