Predicted contraction slightly smaller than previously estimated
Construction output is expected to fall 6.8% this year, according to the Construction Products Association.
The CPA’s autumn forecast was a slight improvement on the 7% contraction it predicted in the summer, while its estimation for 2024 was also revised down – from growth of just 0.7% to a fall of 0.3%.
The housing sector – both new build and repair, maintenance and improvement – is forecast to be the worst affected, due to high inflation and interest rates.
Infrastructure remains strong due to major projects but there are signs that more roads projects are being delayed or cancelled than anticipated.
“With only a couple of months left in a difficult year for construction and looking forward to 2024, the evidence suggests it will still be a while before the clouds begin to lift,” said Rebecca Larkin, the CPA’s head of construction research.
“Both new build housing and RM&I have taken a significant hit from rising interest rates, falling real wages and weak economic growth and demand is expected to remain subdued for house purchases and improvements.”