Industry set for 2.9% drop in output rather than a 5.2% fall

The Construction Products Association has significantly revised up its forecast for industry output in 2012.

CPA economists forecast a 2.9% drop in construction output for this year, compared to its previous forecast of a 5.2% fall.

The forecast predicts output will be flat in 2013 before growing 3.4% in 2014.

Infrastructure is the main growth area with rail construction set to expand by 56% over the next four years.

Association chief executive Michael Ankers said: “Public sector spending cuts are now beginning to bite and with the exception of a steady recovery in the private housing market, where starts are forecast to increase by 5 per cent this year and 11 per cent next, the private sector is pretty subdued.

“What is particularly disappointing is the weakness of the private commercial market where output is expected to decline both this year and in 2013. Office development is slowing down and private finance for social infrastructure is unlikely to make a rapid comeback.”