The only way is up for the construction industry
Fresh data from the Construction Products Association indicates that construction can look forward to 22% of output growth up to 2019, amounting to an extra £27bn of spending.
The upward housing shortage will continue to feed growth at nearly twice present annual inflation and strong annual 10% rises in infrastructure output and government spending across the industry.
The latest forecasts from the Construction Products Association the only way is up for the construction industry with the only major challenge of investing in extra skills and public housing investment.
Noble Francis, Economics Director, said: “Prospects for the construction industry are very bright.
“Infrastructure is forecast to be one of the key drivers of construction growth over the next five years.
“The government has a National Infrastructure Plan in place with a pipeline of projects across the UK worth £411bn.
“As a consequence, we forecast that infrastructure output will experience double-digit growth each year to the end of our forecast horizon in 2019.”
The forecast has factored in a delay until 2018 for the main works on the nuclear power station Hinkley Point C. Due to concerns regarding planning and financing, main works on HS2 are not anticipated to start before 2020.
Francis warned that skill shortages were now being seen as a significant risk to the booming growth forecast.
“Our forecast growth of 21.7% by 2019 for construction has raised a key risk regarding the lack of skilled labour.
“Employment in the UK construction industry is now 390,000 lower than at its 2008 peak. So far, the lack of skilled labour has primarily affected the house building sector.
“As the wider industry activity picks up, however, this issue is likely to spread across the industry.”
Francis added: “In the short-term, it is already putting upward pressure on costs. In the medium-term, the forecast growth will not be possible without significant investment in skills.”