The Leading News & Information Service For The Facilities, Workplace & Built Environment Community

Thursday, 14 November

Growth Good - But Capacity Could Be a Problem

In its latest forecast, the Construction Products Association (CPA) believes that construction output is likely to increase 5.3% in 2015 and 17.8% by 2018.

However, it noted that growth is expected to slow in the medium term due to election uncertainty and capacity constraints.

“Last year’s recovery in construction was driven primarily by 18% growth in private house building,” explained Noble Francis, Economics Director, CPA. “This year, industry growth will be more broad based as a further increase of 10% in private house building is expected to be supported by 8% growth in commercial offices.”

The CPA believes that growth rates across most of the industry are expected to slow in 2016 and 2017 because of uncertainty regarding the outcome of the General Election which may give pause to both contract awards and industry investment. “While this is unlikely to have an impact on construction activity this year, due to the lag between contracts and activity on the ground, it may have an adverse effect on output in both 2016 and 2017,” argued Francis. “Private house building growth is expected to slow from 10% this year to 5% in 2016 and 3% in 2017. In addition, activity in the commercial offices sector, which is still 39.5% below the pre-recession peak, is forecast to grow 7% in 2016 and 5% in 2017. Growth in total construction output, therefore, is expected to slow to 4.2% in 2015 and 3.4% in 2016.”

The industry had concerns regarding capacity constraints in the medium term. While output in the sector during 2014 was 8.5% below the level seen in 2007, overall capacity last year was not seen as a key issue. It had to be a matter of concern that construction output is forecast to surpass the pre-recession peak during the next 18 months, despite the industry having lost 343,000 jobs and considerable materials capacity in the seven years following the financial crisis. 

“As a result, it is essential that there is significant investment in UK construction skills and manufacturing over the next few years if the growth forecast is to be achieved,” concluded Francis.

Pictured: Noble Francis, CPA – “the commercial offices sector, which is still 39.5% below the pre-recession peak, is forecast to grow 7% in 2016 and 5% in 2017”

Article written by Mike Gannon

Share


Related Tags


Related Articles

Lending A Hand Costs Security Guard His Fingers

A security guard has lost his fingers after being asked by a groundworks contractor to lend a hand to do a job he was not employed or skilled to do. Elsewhere, seven...

 Read Full Article
Extra Fast Construction In Wood You Believe It?

Metsä Group’s new visitor centre in Äänekoski, in Central Finland, is a prime example of fast construction using wood. The 1,000sq.m building...

 Read Full Article
Like A Virgin - UK Touched for the Very First Time

India Buildings Limited has appointed Thomas & Adamson for the landmark development of the first Virgin Hotel outside of the US. Thomas & Adamson are a global...

 Read Full Article
Putting A Lid On It - Top Floor DC Build OUt

On February 8, Next Generation Data (NGD) announced the build of an additional 250,000sq.ft of capacity at its mega data centre campus near Cardiff - on the top...

 Read Full Article
Wimpey Builds A Better Workplace

According to the Glassdoor job website, Taylor Wimpey has been voted as one of the best places to work in 2018. Scoring 4.3 out of 5 overall, the national housebuilder...

 Read Full Article
From Hands-free To Jail Bird

A female driver has been sentenced to 3 years in prison for killing a man while driving using a hands-free mobile phone. Samantha Ayres, from Horncastle, caused...

 Read Full Article
Employed Or Not Employed? - Now That Is A Question

As HMRC begin notifying construction firms of the need to carry out status checks on the self-employed subcontractors they engage, tax specialist Qdos Contractor has...

 Read Full Article
London Bridge (and Charing Cross, Cannon Street, Waterloo East, Farringdon) Falling Down

All tracks surrounding landmark London Bridge station are now in place and ready for 2018. Network Rail’s Thameslink Programme has reached another crucial milestone...

 Read Full Article
Sector Deals - Construction Included In First Phase

The week ending Dec 1 saw Business Secretary, Greg Clarke, announce a new government deal designed to transform the construction industry. The flagship deal could see...

 Read Full Article
Put That In Yer Pipe And Line It

  Drainage engineers have used no-dig pipe lining technology to carry out a comprehensive upgrade of surface water and foul drains at an East Midlands power...

 Read Full Article