Construction growth will slow in 2004, according to two economic forecasts.
The Construction Products Association estimates that growth will fall to 1.5% this year and that the sector will decline 0.7% in 2005. Construction should return to growth in 2006, but at a rate of 1.4%, compared with 3.8% in 2003.

CPA chief executive Michael Ankers said: "Although private sector growth is forecast to constrain construction activity over the next three years, government spending continues to keep the industry optimistic, with public sector output forecast to grow 7.5% in 2004, 3.1% in 2005 and 2.5% in 2006."

Oversupply in the office market will continue to cause a decline in the amount of office work available, and is estimated to reduce output 4.7%, following a fall of 6.2% last year.

The other report, by Experian, says construction output will rise 3.2% this year, down from 4.3% in 2003. Growth will fall further in 2005 before it picks up again the following year.

Jane Croot, associate director at Experian's business strategies division, echoed the CPA's argument that government expenditure will buttress the industry.

However, she said: "Health and education construction is expected to see a third year of double-digit growth in 2004, but there are concerns about capacity constraints limiting activity."

Experian expects the construction sector to outperform the rest of the economy.