Contraction in the UK construction industry is due to increase both this year and next, with declines of 6.3% and a further 1.4% predicted for 2012 and 2013, respectively.

This is the latest forecast from the Construction Products Association.

The Construction Industry Forecasts do suggest a return to growth in 2014, but the increasing contraction until then will lead to a reduction of almost £8.5bn in construction activity.

Noble Francis, Economics Director at the Construction Products Association, said: “Construction is currently experiencing sharp falls, both for orders and output as a result of severe cuts in the government’s capital spending, coupled with a very subdued private sector recovery.


"Construction has already lost £4.5bn of work this year as the industry returned to recession for the third time in five years. Prospects for the industry going forward are bleak."

He added: "With the Autumn Statement less than two months away, it is imperative that government prioritises its spending by switching from current spending to capital investment for essential housing and infrastructure, as well as sorting out the long overdue model for drawing in private investment into construction.

"Otherwise, rather than driving economic growth in the near term, construction will keep the UK economy flat-lining as it has been for the past two years."

The Forecast found that public sector construction work will drop 19% between 2010 and 2014, while the private sector will experience a fall of 4% in 2012 but will rise by 15% between 2012 and 2016.

Rail construction is set to rise by more than one third by 2015 and energy construction is set to double by 2016.

(IT)