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Construction industry's 12 per cent fall is worst on record

The construction industry is set to suffer a 12 per cent drop in construction output, the worst on record, latest forecasts from the Construction Products Association (CPA) have revealed

The forecasts indicate that the industry entered 2009 with its sharpest falls in output since 1980 and new orders since 1983.

The CPA also predicts a further fall of 3.4 per cent in 2010 following the 12 per cent drop this year.

Significant positive growth is only expected in 2012, and by the end of the forecast period, in 2013, construction output is still expected to be below levels experienced in 2002.

The gloomy forecasts come despite a number of indicators predicting construction is beginning to turn the corner.

Noble Francis, economics director at the CPA, said: ‘The current economic recession is now having a major impact on our industry and this is the most serious downturn most of us in the industry have ever experienced.

‘We have already lost 60,000 jobs with more expected to follow and an estimated 12,000 construction workers on short time working. The crisis in financial markets during last autumn led to a collapse in credit that is vital to private sector construction,’ he added.

‘The government’s attempt to revive the financial sector, combined with various fiscal stimuli, has left public borrowing at unprecedented levels.

‘Any upturn in construction will be critically dependent upon an increase in credit availability in the private sector and government spending in accordance with its announced plans on the public side,’ Francis concluded.

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