Construction to plunge further in gloomy 2013

 
Ben Southwood
Follow Ben
OUTPUT in the construction industry will continue to collapse in 2013, according to forecasts out this morning.

Construction output will drop by 2.2 per cent this year, the Construction Products Association (CPA) said today, adding to the nine per cent plunge the industry has suffered during 2012.

CPA economics director Noble Francis blamed government cutbacks for the ongoing difficulty, combined with no resurgence from non-state sources of business.

“Public sector construction work continues to bear the brunt of the government’s austerity drive and has fallen by 15 per cent over the last two years,” Francis said.

“Our forecasts show that it is expected to continue to fall by a further seven per cent this year.”

“Unfortunately, growth from the private sector, which government hoped would compensate for this decline in public sector activity, has not materialised and it too continues to contract,” Francis added.

But Francis did suggest that government schemes to boost credit – especially the Funding for Lending Scheme (FLS) – could start to finally bear fruit. He forecast private house building would climb six per cent during the year, putting this down to FLS.

A return to more direct investment spending from the government – particularly through Crossrail, often cited as currently Europe’s biggest construction project – is also a hopeful sign for the industry.

Road construction will also rise by an expected eight per cent on CPA forecasts, but this comes after the 45 per cent collapse seen in 2012, meaning the 2013 improvement in the sector won’t return road construction to 2011 levels.

Output in the commercial sector – the biggest generator of construction work – is forecast to drop 5.7 per cent, while retail construction will fall by 10 per cent, education construction by 9.8 per cent, and health construction by 8.7 per cent.