Construction Industry Tracker – October 2014
Overview
Private and public sector output
- The recent growth in GDP and positive statements from the IMF have masked the full extent of the UK’s reduced construction output.
- Based on the output growth up until 2008, the current total construction output levels are a significant 26% below where they should be.
Some progress has been made but the construction industry is not out of the woods yet. Looking back over 17 years it is clear to see that after a period of more or less consistent growth, the recession sent shockwaves through the industry and we have not yet recovered. Even with the recent upturn, we are still significantly below where construction output should have been if the pre-recession growth had continued.
Mark Robinson, Group Chief Executive of SCAPE
- Total output is expected to be 3% below pre-recession levels in Q3 this year, despite achieving an anticipated 5% quarterly growth
- The private sector is the slowest to recover with expected output levels 31% below where they should be based on the trend up until 2008
- Despite an anticipated 4% quarterly growth in Q3 this year, private sector output remains 7% below the 2008 peak
- Public sector construction output has remained stable and supported the industry, although growth has been relatively stagnant since 2008. Public sector output is expected to be just 9% below the 2008 growth trend.
- Output in the public sector is expected to grow 8% in Q3, remaining 9% up on pre-recession level
This research shows the dramatic and profound impact the downturn has had on the construction industry. Confidence within the sector is yet to recover fully. The analysis also highlights the importance of the public sector development projects as part of the wider construction industry, especially during periods of financial uncertainty.
Peter Hansford, the Government’s Chief Construction Adviser