Construction activity is expected to remain flat at best next year as the industry grapples with Brexit uncertainty, the Construction Products Association (CPA) has warned.
A sharp fall in commercial office building and retail jobs is likely to drag down activity in 2018, despite growth in private housebuilding and infrastructure.
Housebuilding will continue to be a primary driver of growth, with private housing starts rising by 5% in 2017 and 2% in 2018.
In Q2 2017 the government’s Help to Buy equity loan scheme accounted for 40% of new homes and has been a significant policy for supporting building activity. The additional £10bn that government announced for the scheme in October will continue to sustain housebuilding, despite the slowdown in the general housing market.
Output in the offices sector is likely to fall 15% in 2018 and another 5% in 2019, the CPA predicted.
CPA economics director Noble Francis, said: “The fall in construction new orders since the second half of 2016 is now starting to feed through to activity on the ground as projects signed up pre-referendum end and are not being replaced.
“This is especially the case in key areas such as the construction of new commercial offices in London, where demand for new high-profile office space from the financial sector has slowed considerably.”
According to the CPA, infrastructure is likely to the key driver in the next few years with work on projects such as HS2 and Hinkley Point C.
However, Prof Francis pointed out that the sector has been “dogged by constant cost overruns and delays”.
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