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Mainstream Slowing, But Green Building On The Up

Posted: 04/01/2006

The last 12 months have been difficult for the mainstream construction industry with output estimated to have fallen by over 1%, ending 11 years of uninterrupted growth, say the Construction Products Association. However, optimistic as ever, CPA forecasts a gradual recovery in construction activity during 2006 driven by a turn around in government investment.

Commenting on the forecasts, Construction Products Association Chief Executive, Michael Ankers, said: “In 2005 the construction industry was hit by higher energy and raw material costs, weaker private sector activity and a fall of around 3% in government investment in the built environment.  In 2006, however, we expect to see a modest 1% pick-up in overall construction output, largely due to a recovery in public sector investment.

‘Private sector investment continues to remain weak.  Below trend UK economic growth and an uncertain global economy are expected to remain constraints on business investment over the coming year, while poor consumer confidence and a sluggish housing market mean that 10,000 fewer private sector homes are likely to be built this year.  At the same time, the home improvement market will remain depressed.

‘Looking further ahead, we expect to see more substantial growth in construction output during 2007 and 2008, at around 3% per annum, as higher UK economic growth lifts private sector activity and Government presses on with the delivery of its investment plans during the current Spending Review.”

Home improvement expenditure is also expected to continue to fall this year, with private housing repair, maintenance and improvement output dropping 1%, before recovering by 3% per annum during 2007 and 2008 as consumer confidence returns. 

Higher Government investment in education and health is forecast to increase both public non-housing activity and the flow of PFI projects over the forecast period, and a rise in social housing investment is set to both raise new public housing starts from 20,000 homes last year to 26,000 in 2008 and support a sustained increase in public housing RM&I activity over the next three years.

Building For A Future magazine forecasts a steady increase in all sectors of the green building industry, including public housing and school projects as awareness of environmental issues and energy saving continues to spread.

Green Building Press  
 

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