CPA: Construction will expand 23% by 2018
Construction output is set to grow by 23 per cent by the end of 2018, with private housing starts contributing significantly to the expansion.The Construction Products Association's (CPA) autumn forecasts state that private housing starts will grow 18 per cent in 2014 and ten per cent in 2015.According to Dr Noble Francis, economics director of the CPA, consistent levels of demand, government policies such as Help to Buy and the general economic recovery have contributed to the private housing sector's growth.However, he added that increased capacity is necessary in order to meet the CPA's forecasts, particularly from small and medium-sized housebuilders."In addition, there remain serious questions about affordability and higher mortgage repayment costs, together with uncertainty around the future of housing policies given the pending election," he added. "With this in mind, we forecast private housing growth will moderate in the longer term to five per cent per year from 2016."The private commercial sector is forecast to expand by 3.7 per cent in 2014 and 6.1 per cent in 2015.According to Dr Francis, new offices construction is set to grow by ten per cent in 2014 and eight per cent in 2015, followed by seven per cent in 2016, due to an intensification of demand beyond London and the south-east.Growth of eight per cent is predicted in the retail sub-sector due to new, large developments, although this area remains exposed to the long-term trend away from the high street to internet shopping.Meanwhile, infrastructure output is forecast to rise by an average of 8.2 per cent per annum over the next four years, with growth of ten per cent in roads during 2014 and eight per cent in rail.Dr Francis warned that the sector's recovery is not a "foregone conclusion" and that risks surrounding the UK and Eurozone economies, as well as uncertainties created by the 2015 general election, could undermine the growth forecasts.
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