In its latest quarterly forecast, the Construction Products Association (CPA) sees a dramatic slowing in growth, with uncertainty ahead as global issues start to affect the UK market.
In previous years, the predicted 2.8% growth in construction output anticipated by the CPA team would be cause for celebration. However, while a robust figure, this is a sharp revision down from the 4.3% growth forecast just three months ago. Demand remains strong across the industry but the downward revision to the growth forecast stems from concern around a host of price pressures arising from both local and global issues.
The impact of these pressures, and of more general rising costs, on demand will
vary considerably by sector. Across the board the picture is one of positive market conditions in the short term with anticipation of tougher times ahead.
The fastest growth is expected in the industrial sector, in which output is forecast to rise by 9.8% in 2022 and 9.3% in 2023, due to a strong pipeline of warehouse projects, resulting from a long-term shift towards online shopping.
Noble Francis, CPA economicsdDirector, offered this summary of the latest figures: “The major challenge is creeping uncertainty. The immediate picture is one of resilient demand and healthy pipelines. Longer term, the current inflationary pressures, if sustained, will have an increasingly depressing impact, while the continuation, or potential escalation, of conflict in Europe presents an existential risk.