CPA predicts further decline on heels of last year's 12% drop, followed by annual growth of just 1% in 2011-13

The Construction Products Association (CPA) has forecast a further 3% drop in construction output this year. This follows an estimated fall of more than 12% in 2009 - the largest decline in a single year since records began in 1955.

The CPA has predicted that the first tentative signs of recovery will not appear until 2011, but said that even then any recovery would be very slow, with annual growth of less than 1% in each of the three years from 2011 to 2013.

CPA chief executive Michael Ankers said: “Construction has been one of the sectors of the economy worst hit by the economic downturn, and whilst it is widely believed that the wider economy is now out of recession, the construction industry is going to have to wait for at least another 12 months.”

Building site
Commercial projects are set to fall another 15%, but housing starts are already up

He added that output on office, retail and other commercial projects has been particularly badly hit, and that last year's fall of more than 26% in this sector was likely to be followed by a further fall of 15% this year. At the same time, output on industrial projects, which has already fallen by more than 50% from its 2007 peak, is expected to fall still further during the next 12 months.

There are some positive signs, however. New private housebuilding, which recently fell to levels not experienced since the 1920s, has started to recover, with starts this year expected to be 15% higher than in 2009, and with similar levels of growth in each of the next three years.

Even with this growth, however, the number of starts in 2013 will still be only 75% of the number achieved in 2007, and only just over half the number that the Barker review recommended was needed to meet housing demand.

The one area where the forecasts see consistent growth throughout the forecast period is on infrastructure, driven initially by significant investment in rail and road projects, and towards the end of the period by Crossrail and the start of the nuclear building programme.