CONSTRUCTION sector is forecast to grow strongly this year, yet uncertainty from the General Election could cause a lagged effect.
The Construction Products Association (CPA) yesterday said construction output is set to grow by 5.5 per cent this year, but will slow in 2016 and 2017. Growth this year will be buoyed by private housing, commercial property and infrastructure. However, private house building is likely to be vulnerable to policy uncertainty.
“This is primarily due to uncertainty regarding government policy such as Help to Buy, which has otherwise stimulated house building in the last two years,” said CPA economics director Noble Francis. Private house building is forecast to rise 10 per cent in 2015 and by only three per cent in 2017.
“The lag between construction contracts and work on the ground means that construction activity in 2015 probably won’t be impacted, since the majority of work for the year has already been planned. Instead, we expect a break in private and public investment this year for future projects,” Francis said.
Official figures released on Friday showed the construction sector declined in February. However, it contrasted with more upbeat private sector surveys.