Construction growth forecast revised upwards

29 April 2010

Hesitant signs of recovery and a slightly improved forecast for the commercial sector were announced by the Construction Products Association, Construction News reported.

In its spring forecast the CPA reduced its forecast for the level of industry contraction to 2% for 2010, compared to its winter forecast of 3.1%.

Looking ahead, it predicted modest growth of 1.2 % in 2011, followed by another 1 % in 2012 and a further 1.1 % in 2013, considerably more than previous estimates of 0.5, 0.4 and 0.2 % growth respectively.

While the commercial sector is forecast to suffer even more than previously thought this year – falling by 19 % in 2010 compared to a previously predicted 15.1 % - it is predicted to recover quickly, growing by 4.2 % in 2011 compared to predicted drop of 1.1 %.

CPA economics director Noble Francis said: “We are slightly more upbeat about private sector recovery, and slightly more pessimistic about the public sector.

“But because the private sector is a bigger proportion of the total construction output, it means a rise overall.”

He added: “It all very much depends on what sector you are in at the moment.”

Also in Construction News, the National Specialist Contractors Council downplayed talk of an upturn, even though its latest survey indicated increases in the number of orders and enquiries subcontractors were receiving.

Of the respondents to the NSCC’s state of trade survey, 39% reported an increase in orders during the first three months of 2010, representing a significant improvement on the 21% who responded positively in the last quarter of 2009.

Meanwhile, 36% of subcontractors said they had experienced an increase in enquiries from clients and main contractors, while 33 % said they had decreased.

This was the first positive balance seen for enquiries since the first quarter of 2008. But NSCC chief executive Suzannah Nichol said: “One swallow doesn’t make a summer. It is certainly looking slightly more optimistic but the picture is still very mixed.

“You can look at the figures and say ‘fantastic’ but I don’t think things have really changed. I would want to see two years of continuous growth before I got excited.”

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