Construction predicted to fall by more than 5% in 2012

Construction output will fall by more than 5% in 2012, the latest forecast from the Construction Products Association (CPA) reveals.

The CPA predicts that output will fall 5.2% next year followed by a flat year in 2013 but will bounce back to growth in 2014.

However, the CPA warned that by 2014 output would be down 12% on peak levels reached in 2007.

Michael Ankers, chief executive of the CPA, said: “For the construction industry to return to growth there needs to be a strong private sector recovery, but this is just not happening. Continuing uncertainty about the future of the euro zone and a lack of consumer confidence in the UK are holding back important investment decisions.”

The report said that a breakdown of the Euro zone was the biggest risk to the sector and could push output even further into the red.  It added: “These forecasts are dependent upon a considerable recovery in private sector construction and currently the risks to the Association’s central forecast remain clearly on the downside.”

Public sector non-housing work will be the worst hit, declining 23.5% next year and continuing to decline sharply until 2015 when growth is expected to be flat.

Some sectors are expected to remain strong. Private sector housing is expected to grow 2% in 2012 followed by continued steady rises in growth over the coming years.

The industrial and infrastructure sectors are also expected to fare better than most growing 2.3% and 1.6% respectively in 2012.