Strong construction growth predicted by CPA

Output to increase by 21.7% in next four years.

The Construction Products Association (CPA) is predicting the industry will enjoy a period of sustained growth in the next four years.

That is the verdict from the summer edition of the CPA’s Construction Industry Forecasts 2015-2019, which expects a 21.7% rise in construction output by 2019.

An increase of this size will generate an extra £26.9Bn of economic activity to the UK economy, driven by public and private sector construction.

In the short term, 4.9% of growth is expected this year, and output is expected to go up by a further 4.2% the year after.

By 2017, construction output is forecast to have increased by 13.2% and the three key drivers for growth are expected to be private housing, commercial and infrastructure.

In the short term, there are concerns that growth will be affected by a drop in public housing and the skills shortage needs to be addressed in the long term.

However, the three aforementioned sectors, plus increased work on schools and hospitals, means that in the long term, growth is likely.

An anticipated 9% rise in private housing is expected this year, with a further 5.5% next year and 3.5% extra in 2017.

Infrastructure is also predicted to rise significantly and by 2019, the CPA forecasts an overall 72.4% increase in output.

Commercial offices output is also expected to grow by 10% this year and an extra 7% in 2016.

Dr Noble Francis is the Economics Director at the CPA and although he warned that the skills shortage needs to be addressed to ensure the growth happens, he also described the industry’s prospects as “very bright.”

He said: “Prospects for the construction industry are very bright. Construction output is forecast to increase 4.9% in 2015 – almost double the rate of growth for the UK economy as a whole – and 21.7% overall by 2019.

“This growth will mainly be driven by an increase in work across the private housing and infrastructure sectors.

“Our forecast growth of 21.7% by 2019 for construction has raised a key risk regarding the lack of skilled labour. Employment in the UK construction industry is now 390,000 lower than at its 2008 peak.

“So far, the lack of skilled labour has primarily affected the house building sector. As the wider industry activity picks up however, this issue is likely to spread across the industry.

“In the short term, it is already putting upward pressure on costs. In the medium term, the forecast growth will not be possible without significant investment in skills.”

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