The construction sector will reach its nadir in 2011 as public sector money dries up, according to new data

Construction output will reach its low point in 2011 on the back of deep public sector cuts, according to a new report.

The Leading Edge construction report forecasts that output will be 0.2% lower next year as public sector spending suffers a ’large drop’.

The report predicts total construction output this year will be £89.9bn at constant 2005 prices, £2bn lower than output in 2009. This would make 2010 the worst year for the industry since 2001-2.

The first half of 2010 has seen a boom in public sector spending, which is up by over 35% on last year. Leading Edge expects state spending to hold steady during the rest of 2010, and then drop significantly next year.

However, a private sector recovery should keep the industry flat.

Mel Budd, managing director at Leading Edge, said: ”With the market sectors moving at different speeds, contractors and building materials manufacturers are going to have to target the right sectors to maximise any growth opportunities.

“Overall, we forecast that 2010 and early 2011 will be the low point for the construction sector as a whole with limited growth expected to return to total output in 2012.”