Positive growth outlook for the construction industry?
17 Feb 2022
2 min read
The Construction Products Association recently forecast positive growth regarding output in the construction industry (of 4.3%) for 2022. This is great news given the uncertainty that awaited the industry approximately two years ago. However, the forecasted figure is only an average and might not be reflective across all sectors in the construction industry.
We briefly explore growth across various sectors:
- Housebuilding - whilst private housing has estimated growth of 3%, private housing rm&i (repair, maintenance and improvement) is expected to maintain its historically high 17% growth set last year over the course of this year. Public housing is expected to see annual growth of 5% over the next few years but growth in 2024 could still remain below those levels seen pre-2020.
- Infrastructure - the infrastructure sector will drive output over the course of 2022 (with 9.7% growth) but such growth is expected to plateau thereafter.
- Industrial - annual growth of 13% for the next three years is anticipated, despite a contraction in growth in the warehouse sub-sector in 2021.
- Public non-residential - over the past couple of years growth has been quite sluggish. However, this sluggishness should soon stop with the need to construct 500 new schools by the end of this decade.
- Commercial - this was one of two sectors where negative growth occurred in 2021, with growth in 2022 being minimal.
So, some sectors will see substantial growth over the course of 2022 (e.g. infrastructure and industrial) and other sectors beyond that (e.g. public non-residential). Other sectors (e.g. commercial) not so. However any forecast figure regarding output for the commercial sector is subject to most change; and potential upside as working patterns adapt and employers respond accordingly.
In a week of the announcement of record inflation, the forecast can provide no more than controlled optimism.
Credits:
1) The Construction Products Association - Construction Industry Forecast Winter 2021/22
2) Experian Winter 2021/22 forecast
In its latest quarterly forecast, The Construction Products Association (CPA) forecasts that output in the industry will grow by a robust 4.3% in 2022, slowing to 2.5% in 2023 compared to the 13.3% seen in 2021. This demonstrates the remarkable resilience of the sector to the initial Covid-19 lockdown and the end of the Brexit transition period in 2020.