According to Experian® Business Strategies' latest regional construction forecasts, 2003 should be another buoyant year, even though growth rates will be much slower than in 2002. Rates will fall further in 2004 and 2005 as the government reins in spending and the housing market dawdles
Britain's construction industry is set for another good year, according to the latest forecasts from analysts Experian® Business Strategies. However, although growth remains strong, it is likely to be at scarcely more than half the rate achieved during last year's building boom. Next year the rate of expansion in the industry is expected to fall again, to half that expected this year, and 2005 will be slightly slower.

Growth of 8% is forecast for next year. This follows a 14% rise last year. Next year, growth is expected to slow to 4%, and in 2005 to 3%.

Over the next two or three years, increases in government spending are likely to be meagre, a slowing housing market will leave housebuilders feeling more cautious, and a subdued office market will lead to a fall-out in construction in the South. In fact, between now and 2005, office construction in the South is likely to move into recession.

Northern and central regions are forecast to experience the strongest growth over the next few years. This year is expected to be particularly robust, with percentage growth in double figures for Wales, the North-east, the East Midlands, the North-west and Yorkshire and the Humber.

Between now and 2005, office construction in the South is likely to move into recession

In most northern and central regions, which are less dependent than the South on office construction and where, in fact, office markets are still relatively healthy, construction activity in the commercial sector is not expected to fall. However, all regions are likely to see a moderation in growth next year and in 2005. Central regions – led by the West Midlands, Wales and the East – are set to see the steadiest growth rate, predicted at 4% for both years.

The North will fair well in 2004, with growth of 6%, but this is set to fall to 2% in 2005 as activity in the North-west declines following several years of strong infrastructure work. Only marginal growth is expected in the North-east. In Scotland, growth is likely to pick up, reaching 6% towards the end of 2005.

At a glance: 1st quarter 2003

↑ Total orders
↑ Housing orders
↑ Non-housing orders
↑ Northern regions
↓ Central regions
↓ Southern regions
↑ Scotland
↑ Wales

↓ Total output
↓ Total new work output
↓ Total R&M output
↓ Northern regions
↓ Central regions
↓ Southern regions
↓ Scotland
↓ Wales