Construction output could fall by 20%

Construction output is predicted to fall 20% by 2011 before returning to growth by 2012, according to new research.

The GB construction industry forecast issued by Leading Edge says that the new build commercial and industrial sectors are now being hit as hard in 2009 as housing was during 2008.

It forecasts that the industrial sector is going to be the worst hit with output down by 32%. Added to this, new housing and commercial output are both forecast to see significant falls.

Even though housing is forecast to return to growth in 2010, the expected fall in public sector spending following the election will cause total construction output to fall again next year, albeit by smaller amount than in 2009.

Repair and maintenance, traditionally a resilient sector, is also predicted to fall in output between 2009-2011, although the damage will be less severe when compared to the ‘new build’ sectors. 

The forecast predicts a fall in total construction industry output of 15.0% in 2009, compared to 2008. This will give a figure of £93.3bn at 2005 prices. The following two years, 2010-2011, are forecast to see a further combined fall of 5.2% in total construction output before returning to growth in 2012.