The Construction Products Association (CPA) is forecasting a 60,000 rise in private housing starts over the next five years.
The CPA’s Winter construction industry forecast predicts starts will rise 35% this year to an estimated 100,000, before increasing steadily to 160,000 in 2015, which would still be 13% below pre-recessionary levels.
It said the growth could be achieved despite fragile consumer confidence and affordability for first-time buyers acting as a constraint on demand.
Private housing starts are expected to grow 5% in both 2011 (105,000 units) and 2012 (110,000).
Public housing starts are expected to grow this year to 32,000 but then reverse 45% over next two years, before growing again by 5% in 2014.
Completions in public housing are predicted to be 22,000 in 2015, down from 33,000 in 2009.
Total construction output is forecast to be up 4.5% in 2010, before falling 2% in 2011 and 0.7% in 2012, then returning to growth in 2013 (up 1.6%), reaching a 3.6% growth rate in 2015.
“UK economic growth is expected to continue over the forecast
period despite the government’s corporate spending review confirming the speed and depth of
public sector cuts,” the forecast says.
“Interest rates are expected to remain at historic lows in the near term in spite of relatively high inflation, which will be exacerbated by January’s VAT increase to 20%.
“Although a ‘double dip’ recession for the economy is not anticipated, the risks to economic growth clearly remain on the downside due to the effect of public sector cuts directly
on economic activity and indirectly on private sector sentiment.”
The forecast gives both “A” and “B” scenario forecasts for the economy.
• The full report is available to CPA members on the organisation’s website. Click here
