‘No UK recovery before 2014’

The UK construction industry is not expected to see significant signs of recovery before 2014, according to the latest forecasts from the UK's Construction Products Association, which adds that by that time output will be 12% lower than at its peak in 2007.

UK construction output is forecast to fall by more than 5% next year and remain flat throughout 2013.

Michael Ankers, chief executive of the Construction Products Association, said, "For the construction industry to return to growth, there needs to be a strong private sector recovery, but this is just not happening."

He said that continuing uncertainty about the future of the Euro zone and a lack of consumer confidence in the UK were holding back important investment decisions. He forecast that as a result, the largest area of construction activity - private commercial work - would fall by a further 5% in 2012, and remain at that level in 2013.

He added, "At the same time the cuts in public sector construction activity are really beginning to bite, with construction work on schools, hospitals, and other non-housing work forecast to fall by 23% compared with 2011."

He said that despite "the encouraging announcements" on public sector investment on infrastructure projects in the Chancellor of the Exchequer's Autumn Statement, capital spending on construction would still fall 30% by 2013.

"Although new housing starts in the private sector are set to continue their slow recovery," said Mr Ankers, "in the short term, these are more than offset by the sharp fall in public sector housing. As a result, the number of new homes started in 2012 is forecast to be 5,000 fewer than this year and, at just 113,000, this is less than half the number of homes needed to accommodate the additional number of households expected to be created over the next 12 months."

The Construction Products Association's forecast also predicted that UK public sector construction would fall 18% between 2011 and 2014. Education construction would fall by a quarter in 2012, it said, and health construction by 15% in the same year.

However, it forecast a rise in UK infrastructure construction of 20% by 2015, while energy construction is expected to increase threefold by 2015.