Swot Analysis
Summer 2011 edition - £120
construction industry forecasts 2011-2015
Key Points Include:
• • • • • • Construction output to fall 0.5% in 2011 before falling a further 2.8% in 2012 Total housing starts in 2011 less than half needed to meet number of households created Public sector construction work to fall by 26% by 2014 Private sector construction work to rise by 23% by 2015 Roads construction set to halve by 2014 Energy construction set to rise threefold by 2015
Overview
The prospects for construction over the next three years are poor with no significant growth until 2014 and even by 2015, output will not have returned to pre-recession levels. Output in the industry is expected to fall by 0.5% during 2011 with public investment in construction falling sharply, not offset by the rise in private sector construction. 2012 is set to be the first full year of impacts of public sector spending cuts with construction from public sector falling a further 12% and, overall, the industry is set to fall by almost 3%. 2013 is set to see marginal growth with private sector investment finally offsetting public sector falls but it is only in 2014 that the industry is expected to see considerable growth, of 3.4%, as it begins recovery. Despite the pessimism there are areas within the construction industry that are anticipated to enjoy growth in the private sector. Private housing starts are expected to grow in each year of the forecast and, by 2015, are expected to be double the figure seen in 2009. Yet this will still be 14% lower than in 2007 and starts throughout the forecast period will be less than needed to meet the number of households expected to be created each year, exacerbating the gap between demand and supply. Commercial offices output is expected to rise by more than 50% over the next five years, boosted by high profile projects within London such as the Shard, Broadgate, Pinnacle, and ‘Cheesegrater’ at 122 Leadenhall. Despite subdued economic activity
construction industry forecasts 2011-2015
Key Points Include:
• • • • • • Construction output to fall 0.5% in 2011 before falling a further 2.8% in 2012 Total housing starts in 2011 less than half needed to meet number of households created Public sector construction work to fall by 26% by 2014 Private sector construction work to rise by 23% by 2015 Roads construction set to halve by 2014 Energy construction set to rise threefold by 2015
Overview
The prospects for construction over the next three years are poor with no significant growth until 2014 and even by 2015, output will not have returned to pre-recession levels. Output in the industry is expected to fall by 0.5% during 2011 with public investment in construction falling sharply, not offset by the rise in private sector construction. 2012 is set to be the first full year of impacts of public sector spending cuts with construction from public sector falling a further 12% and, overall, the industry is set to fall by almost 3%. 2013 is set to see marginal growth with private sector investment finally offsetting public sector falls but it is only in 2014 that the industry is expected to see considerable growth, of 3.4%, as it begins recovery. Despite the pessimism there are areas within the construction industry that are anticipated to enjoy growth in the private sector. Private housing starts are expected to grow in each year of the forecast and, by 2015, are expected to be double the figure seen in 2009. Yet this will still be 14% lower than in 2007 and starts throughout the forecast period will be less than needed to meet the number of households expected to be created each year, exacerbating the gap between demand and supply. Commercial offices output is expected to rise by more than 50% over the next five years, boosted by high profile projects within London such as the Shard, Broadgate, Pinnacle, and ‘Cheesegrater’ at 122 Leadenhall. Despite subdued economic activity