Growth reliant on infrastructure delivery
Activity in the construction industry is rising at a faster pace following the EU referendum than initially expected according to the latest forecasts by the Construction Products Association (CPA). Construction output is expected to rise each year between 2017-2019; by 1.3% in 2017, 1.2% in 2018 and 2.3% in 2019.
While the figures may fuel hope of a resilient UK construction industry amid Brexit-related anxieties and rising costs, the growth masks a considerable difference in activity across the key construction sectors. Infrastructure projects are expected to be the industry’s main growth engine, driven by a strong National Infrastructure and Construction Pipeline valued at £300 billion over the next four years.
House building is also expected to remain a key source of growth, with private house building starts rising by 7.2% between 2017 and 2019, underpinned by a continued upward trend in house prices, demand from first-time buyers and the Help to Buy equity loans. In 2016, Help to Buy accounted for 39.8% of new home sales in Q4 and has been a significant government policy for supporting building activity.
Noble Francis, economics director at the Construction Products Association said: “We forecast that output in commercial offices will fall 1.0% this year and a further 12.0% in 2018. Industrial factories construction is expected to fall 5.0% in 2017 and 4.0% in 2018. However, this is expected to be offset by strong growth in infrastructure and private housing.”