The construction industry is expected to experience an acute recession this year according to the Construction Products Association.
CPA blames huge falls in the two largest construction sectors, namely private housing new build and private housing repair, maintenance and improvement (RM&I).
The prediction is set against a backdrop of a flatlining UK economy, falling real wages and rising mortgage rates that will hit demand for new housing and home improvement works.
The CPA forecasts construction output to fall by 7% in 2023 before recovering slowly in 2024 with growth of just 0.7%.
Private housing output is worth £41 billion a year to the UK economy and is forecast to be the worst-affected construction sector in 2023.
Private housing RM&I is worth £29 billion to the UK economy each year. The sector reached “historic highs” between 2020 and early 2022 due to increased working from home and a “race for space”. But since March 2022, activity has been falling due to persistent inflation, rising interest and mortgage rates, and falling real wages.