The construction industry will avoid a post-Brexit recession but activity will slow and remain broadly flat over 2017 and 2018, according to the latest Construction Products Association (CPA) forecast.
Economists at the CPA said the industry would avoid a post-EU referendum recession with slow growth of 0.2% and 0.3% this year and next.
Faltering commercial workloads will be offset by strong growth in infrastructure and school spending over the next two years.
Major infrastructure projects such as HS2, Hinkley Point C nuclear power station and the Thames Tideway Tunnel are anticipated to provide growth of 6.2% in 2017 and 10.2% in 2018.
The CPA’s forecast highlights:
- Offices – increase by 8.0% in 2016, fall by 3.0% in 2017 and 10.0% in 2018;
- Factories – fall by 5.0% in 2016 and 2.0% in 2017;
- Infrastructure – increase by 6.2% in 2017 and 10.2% in 2018;
- Private housing – increase by 2.0% in 2016, flat in 2017, fall by 2.0% in 2018;
- Retail – fall by 8.0% in 2016, 4.0% in 2017 and 2.0% in 2018.
Noble Francis, economics director at the CPA, said: “From the second half of 2017 there is likely to be a clear division between the fortunes of privately-funded construction sectors – such as commercial offices and industrial factories, where the current uncertainty is likely to have a major impact, and those that are largely unaffected by post-referendum uncertainty, such as infrastructure and education, which are either publicly-funded or in regulated sectors.
“With an upcoming Autumn Statement, it is vital that the chancellor focuses on reducing uncertainty for the private sector, sustaining the housing sector and ensuring delivery of education construction and major infrastructure projects already in the pipeline.”
