Outlook worsens for UK construction

The latest forecast from the UK's Construction Products Association says the country's construction output will fall -16% this year and -5% in 2010. This is a downgrade from the previous forecast of -12% and -3,4% declines in 2009 and 2010 respectively.

Commenting on the forecasts, Construction Products Association chief executive Michael Ankers said, "Prospects for the industry have deteriorated significantly over the last three months, with new orders for construction work falling at a record rate. This year we expect the industry to suffer its largest fall ever experienced in a single year and with a further fall in out put in 2010, output will have fallen faster in these two years than in any of the previous post war recessions."

The Association went on to say that it does not expect a significant recovery in UK construction output until 2012. By 2013 - the end of the forecast period - output is expected to be on a par with levels seen in 1999.

Mr Ankers continued, "Although the private sector housing market has experienced some small improvement over the last few months, such is the scale of the downturn that we are still only forecasting there will be 72000 new houses built this year, the lowest figure since 1924 and over -20% below the number started in 2008.

"The only bright spots for the industry are the continued investment by government in its education and health programmes and in the prospect of increased investment in infrastructure, particularly rail schemes."