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Construction output predictions revised

Construction output predictions revised

The Construction Products Association (CPA) has adjusted its overall output predictions for 2015 and 2016 to take into account unexpectedly muted performance in Q3.The organisation now expects output to increase by 3.6 per cent this year and by 3.8 per cent in 2016 - down from its summer predictions of 4.9 per cent and 4.2 per cent respectively.It also downgraded the four-year outlook from 21.7 per cent growth to 19.7 per cent for the period between 2015 and 2019. While these figures are lower than hoped, they still represent a substantial trend towards improvement in both the short and medium term.The CPA decided to lower its expectations in light of figures published by the Office for National Statistics (ONS), which suggested that construction output had fallen by 2.2 per cent since Q2, which was not expected.Experts hope that the downturn will be temporary, but this is the second time the CPA has reduced its growth predictions this year.CPA economics director Noble Francis said: “While growth prospects in construction remain positive, there are significant risks.“Government austerity focuses on current spending rather than capital investment but the risk remains that if government cannot reduce current spending as much as it anticipates, it may cut public construction projects to achieve its aims of eliminating the public sector deficit.“In addition, within the construction industry, the key concerns regard skills shortages, which have already been reported in the housing sector but may become more prevalent across the wider industry over the next 12 to 18 months due to the forecast growth.”He also predicted that city regions such as Birmingham and Manchester would be major drivers of growth over the coming years, whereas supermarket expansion was likely to slow down significantly. 

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