Today’s figures from the ONS report that construction output fell by 0.5% in the last quarter of 2011 and as a result the Construction Products Association remains pessimistic about the medium term prospects for the industry.
Commenting on these latest figures, Noble Francis, Economics Director at the Construction Products Association said: ‘The trend in construction output is clearly still downwards at a time when government acknowledges that construction is one of the sectors necessary to help the economy avoid slipping back into recession. Overall these figures only serve to reinforce our concerns about the prospects for the industry over the next 18 months.
‘The Association’s latest forecasts suggest that construction output will fall by more than 5% during 2012 and there will be no significant recovery in the industry until 2014. This year will see a dramatic 14% fall in public sector construction as spending cuts begin to bite. The real concern, however, is that private sector construction is not recovering fast enough to offset this and will fall further during 2012, with the private commercial sector 5% lower than this year. With forecasts by the Ernst & Young Item Club this week suggesting that bank lending is likely to fall over the next 12 months, this will only exacerbate the problems for the construction industry and the economy as a whole.’