The Construction Products Association (CPA)\u2019s Summer Forecast had both good news and bad for the industry.<\/p>\n
Economists at the trade body have reported that growth for the whole of 2018 is set to fall to 0.6%, in the first dip for 5 years. But they anticipate that construction output will bounce back over the next couple of years – to 2.3% in 2019 and 1.9% in 2020.<\/p>\n
The private housing sector output is forecast to rise 5% in 2018 and 2% in 2019, driven by first time buyer demand, which has seen an increase with the government\u2019s Help to Buy scheme.<\/p>\n
The infrastructure sector remains a primary driver of growth for the whole construction industry, with output projected to hit a historic high of \u00a323.6 billion by 2020. This has been driven by large projects including HS2 and Hinkley Point C, despite significant delays to both projects.<\/p>\n
The CPA also noted that without the forecast growth in the private housing and infrastructure sectors, total construction output would fall by 3% in 2018 and remain flat in 2019.<\/p>\n
The collapse of Carillion at the start of the year rocked the industry. The firm\u2019s demise, along with a harsher than normal winter, cost UK construction \u00a31 billion of work. However CPA economists estimate that 60% of this work will be recovered.<\/p>\n
Uncertainty over Brexit is the biggest thorn in the side of commercial construction, due to the impact it has had on international investment.<\/p>\n
Footfall on the high street continues to decline as shoppers increasingly turn to online retailers. The commercial sector has borne the knock-on effect of this market shift, with retail construction expected to fall by 10% this year.<\/p>\n
Noble Francis, Economics Director at the Construction Products Association, summed up the forecast:<\/p>\n