Public sector construction work will not be enough to offset the decline in private sector spend over the next two years, research has revealed.
The study, by construction forecaster Hewes, predicts that private sector work will fall 18% to £44bn between now and 2010, and public sector output will fall 5% to £27.2bn.
To make up for the £9.7bn fall in private work, public sector work would have to rise by 34%.
Martin Hewes, managing director of Hewes, which bases its forecasts on data from the Department for Business, Enterprise and Regulatory Reform, said: “It shows that the public sector is not quite the safety net people like to think it is. It looks unlikely that investment in the sector could rise at the necessary level against the background of weaker economic growth and rising public borrowing.”
He said the fact that the public sector accounted for only 35% of the construction market exacerbated the problem. “Combined office, retail and leisure spend is £13.5bn per year, compared with a figure of just £5.2bn in education.”
Overall, the report points to a three-year slump in output between now and 2010. Volumes across all construction markets are expected to fall by 4% in 2008, 7.5% in 2009 and 3% in 2010.