{"id":60918,"date":"2019-07-29T12:41:22","date_gmt":"2019-07-29T11:41:22","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=60918"},"modified":"2019-07-29T12:41:22","modified_gmt":"2019-07-29T11:41:22","slug":"cpa-construction-output-2019","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/cpa-construction-output-2019\/60918\/","title":{"rendered":"CPA anticipates 0.3% decline in construction output figures for 2019"},"content":{"rendered":"

Output figures for Britain\u2019s construction industry are expected to be less than previously forecast over the next three years and have given concerns around the Government\u2019s ability to deliver on major infrastructure projects<\/h2>\n

The Construction Products Association<\/a>\u2019s (CPA) Summer Forecast for 2019-2021 anticipates a 0.3% decline in total construction output figures for 2019, in line with previous projections, but the forecasts for 2020 and 2021 have been revised down to 1.0% and 1.4% from 1.4% and 1.7% respectively since the Spring.<\/p>\n

The\u00a0CPA Summer Forecast<\/a>, which provides a comprehensive analysis of the drivers of construction activity across thirty industry sectors, identifies the infrastructure sector as a main driver of growth and vital to the fortunes of the construction industry in the next few years.<\/p>\n

Total construction output figures would fall by 1.7% in 2019 and experience no growth up until 2021 without the delivery of major infrastructure projects, which have been put into further doubt given the new Prime Minister Boris Johnson\u2019s commitment<\/a> to initiate a review of HS2.<\/p>\n

High-profile projects such as the Thames Tideway Tunnel<\/a>, High Speed Rail<\/a> and Hinkley Point C<\/a> are expected to drive activity in the infrastructure sector as well as the new five-year regulatory periods in the water & sewerage, rail and roads sub-sectors. After almost a decade of austerity, local authority funding will also prove important to activity on roads. The CPA Forecast expects delays to these projects to pose a major risk to the sector and, in turn, put the fortunes of the wider construction industry into question.<\/p>\n

Noble Francis, economics director at the Construction Products Association, said: \u201cConstruction output in some key sectors has already been badly affected by Brexit uncertainty over the past 18 months and when you add in rising concern about government delivery of major infrastructure, it is a highly uncertain time for the construction industry.<\/p>\n

\u201cActivity on the ground, overall, still remains at a high level after rising by 28% between 2012 and 2017. However, output growth slowed to only 0.3% in 2018 and we forecast that construction output will fall by 0.3% in 2019 before the growth of only 1.0% next year, even with a smooth Brexit and with government delivery of infrastructure projects.\u201d<\/p>\n

While the overall construction output figures signal growth, it also masks a high degree of variation across regions, sectors and sub-sectors. Levels of construction activity remain high in the Midlands, the North West as well as Yorkshire and the Humber, whilst declines inactivity can be found in key regions such as London, the South East and parts of the East of England.<\/p>\n

On a sectoral basis, activity levels remain high in private and public housing, industrial warehouses and infrastructure. Sub-sectors such as commercial offices, commercial retail and industrial factories continue to endure falls inactivity, however, mainly due to investor sentiment being impacted by the continued economic and political uncertainty surrounding Brexit.<\/p>\n

Noble continued: \u201cThe fall in construction output during 2019 and 1.0% growth in 2020 masks the stark differences in regional and sectoral fortunes across the country.<\/p>\n

“Infrastructure output<\/a> is forecast to rise by 9.3% this year but this growth is highly dependent upon the delivery of the \u00a34.2bn Thames Tideway Tunnel, the \u00a319.6bn Hinkley Point C nuclear power station and the \u00a356bn HS2 high-speed rail project.<\/p>\n

Private housing is the largest construction sector, worth \u00a336bn in 2018, and it has been the key driver of industry growth over the past five years. Activity in the sector is currently slowing and private housing starts are forecast to fall by 2.0% this year before growth of 1.0% in 2020.<\/p>\n

The sharpest falls in new housing demand are occurring in London and the South East, particularly for prime residential flats. However, these falls are currently being partially offset by house building growth in the North West, Yorkshire and the Midlands, buoyed by Help to Buy.<\/p>\n

Commercial output fell by 6.4% last year and we forecast it will fall by 6.9% in 2019 and a further 4.7% in 2020 due to the impact of Brexit uncertainty on the offices sub-sector, in particular investment in new offices towers in London, as well the impact of continued shift of consumer spending online and its adverse impacts on new investment in retail construction.\u201d<\/p>\n

Overall, it is essential that the government commits to better delivery of the major infrastructure projects that it says are essential for the country. Only then will construction provide a boost to UK economic growth<\/a> and give firms the confidence to invest in vital capacity and skills as well as modern methods of construction such as digitalisation and offsite manufacturing.<\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

Output figures for Britain\u2019s construction industry are expected to be less than previously, giving concerns about the ability to deliver on major 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