Credit rating agency says Brexit and inconclusive general election result hampering confidence
The construction industry is facing stronger economic headwinds over the next three years, according to Experian in its latest construction forecast for the UK.
“Brexit, the election of, to say the least, an eccentric US president, and now an inconclusive UK General Election, have made for a volatile political and economic landscape,” Experian said.
Following the UK General Election result, the credit scoring firm has downgraded its spring forecast for UK construction output growth by 2019 to 4% (£143.3bn) from 5%.
The main reason given is that 2018 is now expected to be weaker as the “more muted economic prospects” impact on the commercial construction sector, which Experian anticipates declining further over the next two years as the office market cools and retail remains in the doldrums.
But Experian said it was more “bullish” on the housing sector as the government pursues a major policy reversal and encourages local authorities to start building again, yet it does not expect the sector to meet the aspiration to build between 250,000 and 270,000 new homes a year from 2020.
Renewed vigour in the housing sector has also bumped infrastructure from being the expected “star performer” over the next three years in terms of output growth.