Last year, construction output grew more than the UK economy as a whole, but the outlook over the next few years is flatter than Patagonia. Experian Business Strategies crunches the numbers
With the activity index at 51 points, contractors’ workload continues to grow, although the rate of that growth has declined in the past three months. The general forecast is that the market will pretty much stay as it is.
The volume of output increased 3.5% in 2004, performing marginally better than the UK economy as a whole – GDP increased at a rate of 3.1% over the same period.
Construction output growth is expected to slow to 2.4% in 2005. The outlook for 2006 is a growth rate of 1.8%. In 2007 output is forecast to rise 2.9% as the prospects for the private housing and infrastructure sectors improve.
Following rapid growth of 20.5% in 2004, the public housing sector, driven by the government’s decent homes policy, is forecast to be the industry’s fastest growing sector in 2005.
The tender enquiries index suffered a substantial fall in March, leaving it at 54 points. Firms’ optimism about short-term employment prospects fell a point to 52. Optimism concerning tender prices however, climbed a point to 63.
The Leading Construction Activity Indicator, which provides a short-term forecast of activity levels in the industry, indicates continuing growth in construction activity over the next three months, with the growth rate fluctuating slightly over the period.
This an extract from the monthly Focus survey of construction activity undertaken by Experian’s Business Strategies division on behalf of the European Commission as part of its suite of harmonised EU business surveys. The full survey results and further information on Experian Business Strategies forecasts and services can be obtained by calling 0870-196 8263 or logging on to www.constructionfutures.co.uk
The survey is conducted monthly among some 800 firms throughout the UK and the analysis is broken down by size of firm, sector of the industry and region. The results are weighted to reflect the size of respondents. In addition to the results published in this extract, all of the monthly topics are available by sector, region and size of firm. In addition quarterly questions seek information on materials costs, labour costs and work in hand.