Growth prospects for the UK construction industry have been downgraded amid “clear signs” next year will be “difficult” for the industry.
Forecasters at trade body the Construction Products Association (CPA) now believe the sector will expand just 0.7 per cent in 2018, the slowest rate in six years and a downward revision from its previous estimate of 1.2 per cent, reports the Telegraph.
Noble Francis, economics director at the CPA, says that while contractors are currently still reporting high current activity there are “clear signs” the sector is slowing.
He said: “Prospects for construction have been adversely affected by slowing UK economic growth and falling real wages on one side and sharp rising costs on the other.
“A fall in new investment, especially where it is large international investment looking for a long-term rate of return, is forecast to lead to declines in the commercial and industrial sectors.”
Private housebuilding growth is also predicted to slow down next year to 2 per cent, down from 3 per cent this year, due to uncertainties over the strength of consumer confidence and falls in real earnings.
However construction output growth for this year is now expected to be higher than previously thought, at 1.6 per cent, beating the CPA’s previous estimate of 1.3 per cent.
The CPA attributed the upgrade to a sharp rise in contracts related to repairs to blocks of flats in the wake of the Grenfell Tower disaster.
The forecasts come after construction output underwent a surprise dip in May of 1.2 per cent on the previous month and by 0.3 per cent on the year, according to Office of National Statistics figures last month.
