Construction firms fear slow growth

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 0.7pc in 2018, the slowest rate in six years and a downward revision from its previous estimate of 1.2pc. Noble Francis, economics director at the CPA, says that while contractors are 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 house building growth is also predicted to slow down next year to 2pc, down from 3pc this year, due to uncertainties over the strength of consumer confidence and falls in real earnings. However, construction output growth for this year is expected to be higher than previously thought, at 1.6pc, beating the CPA’S previous estimate of 1.3pc. 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.

‘A fall in new investment is forecast to lead to declines in the commercial and industrial sectors’