Research company Experian this week said it expected construction output growth to slow to less than 2% for this year and next.

It said that overall growth would drop to 1.3% this year, with 1.8% growth next year.

It painted a gloomy picture of the housing market next year, dragged down by a 5% fall in the level of private housing.

This indicates that private housing will be the worst performer in the construction sector overall, confirmed by downbeat forecasts from housebuilders.

Last week it was housebuilder Wilson Bowden that announced bad news and this week it was the turn of Wimpey.

Experian’s forecast said the private housing sector would remain flat this year and return to growth again in 2007, at 2%.

Experian’s forecast was moderately more optimistic than the Construction Products Asscociation, which said that it expected construction output growth to slow to 0.6% this year and 0.9% next.

But it was more negative about prospects for private housing, predicting a 2% fall in growth this year and a drop of 7% next year.

Experian expected output in public housing to grow 10% in 2005 and 2006, half the level of growth in 2004.

James Hastings, associate director at Experian, said: “Robust growth is expected in new public housing, but as public sector only accounts for 39% of total output, contractions in certain private sectors and lacklustre growth in others will constrain overall performance.”

He added: “The slowdown in consumer spending and a gloomy outlook for UK manufacturing and housing market weakness will induce the comparatively flexible private sector to postpone non-essential construction work.”

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