Builders' Merchants News

Construction sector to contract again in 2011

Published:  23 March, 2011

HAMPSHIRE: Total UK construction output volume in 2011 is forecast to be down by 2.3% on 2010, according to the construction research specialists, Leading Edge.


The fall is mainly due to a reduction in output in the public sectors as the Government cuts start to bite.


However, on the positive side, the 2011 forecast of £98 400m is 3.9% higher than 2009 at constant prices and higher than 10 of the 15 preceding years. It has increased slightly compared to the forecast made in 2010, partly due to an improvement in many of the chief indicators in the private sector.

Leading Edge forecasts that all the private sectors - including housing, commercial, industrial and infrastructure - will see output growth during 2011. In particular, the private housing sector will see the highest growth rate this year, while output in the commercial sector will be encouraging, despite many of the projects associated with the Olympics coming to an end.

Mel Budd, managing director of Leading Edge, commented: "Although we expect the economy to maintain its slow but steady growth in 2011, the construction sector will suffer from a double dip recession due to the deep cuts in the public sector's capital spending.

"Overall, we forecast a decline in output volume in 2011 followed by slow growth for the construction industry as a whole from 2013 onwards. Total output in 2015 will be around 3.5% higher than 2010."