The Construction Products Association (CPA) predicts slow growth for the industry over the next couple of years, with greater reliance on government for sustained construction work.
Growth will slow to 1·5% this year, with output dropping to 0·7%.

Higher interest rates, and falling household spending are set to curb construction spending in the housing, retail and leisure sectors. Oversupply in the office market will also continue to hold back development in the commercial sector, according to the CPA.

However, CPA chief executive Michael Ankers says that the construction industry will be supported by government spending: "Public sector output is forecast to grow by 7·5% in 2004, 3·1% in 2005 and 2·5% in 2006." This, says Ankers, will keep construction out of recession.

One factor which will keep construction output figures down is from the rail sector. As rail maintenance contracts are brought in-house by Network Rail, they will be excluded from the construction output statistics. The CPA estimates that this will cut 1% off total construction output for 2004.

The CPA represents the UK's suppliers of construction products, components and fittings. The sector has an annual turnover of £30 billion and accounts for 40% of total construction output.

Source

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