UK construction industry set to stagnate for almost fifteen years.

While reports set at various levels of optimism indicate that the beginning of a recovery for the UK economy is due to “kick off” around the same time as the World Cup in South Africa, late June 2010, the future for the construction industry in the British Isles, looks considerably more bleak.

Analysts continue to go as far as to predict that the construction industry will not be back on its feet till the Summer Olympics of 2020. Around about that time, UK construction figures will be back around the levels that they were during the World Cup of 2006. That makes for almost fifteen years of stagnation for an industry that was responsible for almost ten percent of the UKs national income at its peak.

Predictions are that the construction sector will decline by 16 per cent in 2009 with a further 5 percent decline in 2010. In true terms, the decline will bottom out during 2011. From that year onwards up until 2020, growth will begin but beginning at immeasurably low levels, until finally arriving at a recovery figure of £82.5 billion in 2020. These figures are part of a report issued by the Construction Products Association (CPA).

According to the CPA, construction output will creep up from £69 billion to just £69.3 billion in 2011, a massive 16 per cent behind 2006’s levels.
A spokesman for the CPA announced that the severity of downturn in the construction sector was causing a knock-on effect seriously affecting the entire UK economy. The general consensus was that last week’s downward revision of gross domestic product, from 1.9 per cent to 2.4 per cent, was to a large extent due to the downturn in construction starts.

One glimmer of light coming out of the CPA’s report was the estimate that the public sector, which currently accounts for a third of new work in the industry, will be the one area of relative stability.

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Tags: Construction Industry, Construction Products Association, CPA, Financial News, Recession, Summer Olympics