Construction Products Association Winter Forecast

Construction Products Association Winter Forecast

In February the Construction Products Association (CPA) published its winter forecast for the construction industry with the headline that total construction output is forecast to fall by 4.7% in 2023. It notes however that this fall is from a historic high following two years of growth that raised activity to levels higher than pre-pandemic.

With the effects of a wider UK economic recession, falling real household incomes and rising interest rates it predicts the sectors most reliant on households will be impacted hardest. The largest construction sector is private housing and the CPA forecasts an 11% fall in output in 2023 and a 1% fall in 2024 resulting from rising mortgage rates, falling real wages, low consumer confidence and concerns regarding the length and depth of the recession in the wider economy and general housing market.

Private housing repair, maintenance and improvement (rm&i), now the third largest construction sector having reached historic highs after the pandemic boom peaking in March 2022 but falling since then, is anticipated to decline by 9.0% in 2023 before rising marginally by 1.0% in 2024.

In other sectors activity is set to continue to grow this year with infrastructure forecast to rise 2.4% in 2023 and 2.5% in 2024 and industrial output with a similar rise of 2.3% in 2023 before falling by 4.6% in 2024.