Decade of construction growth ends

The ongoing boom in the construction economy since the mid 1990s was halted in 2005, new figures have revealed. The Construction Products Association (CPA) found that output reduced by 1% last year but predicted a gradual recovery this year and further gains in 2007 and 2008. The figures married with an economic report released last month by consultant EC Harris, first revealed in QS News last month.

CPA chief executive Michael Ankers said the sector was hit by higher energy and raw material costs, weaker private activity and a fall of around 3% in government investment in the built environment last year. Ankers added: "Private sector investment continues to remain weak. Below trend UK economic growth and an uncertain global economy are expected to remain constraints on business investment over the coming year, while poor consumer confidence and a sluggish housing market mean that 10,000 fewer private sector homes are likely to be built this year. At the same time, the home improvement market will remain depressed."

Ankers predicted more substantial output in 2007 and 2008, at 3% per annum, as higher UK economic growth lifts private sector activity. The CPA also predicted an uplift in the office market, a rise in social housing investment, more investment in industrial building work and the return of more highways work.

See the CPA forecast table for overall output figures.