Sectors - Civil

Construction to Grow by 14% in 2021

Construction industry forecasters have predicted that construction output could increase by 14% in 2021 and by 4.9% in 2022.

Experts from the Construction Products Association (CPA) believe that the construction industry will see a “W”-shaped recession and recovery. The CPA’s latest scenarios take into account the current lockdown situation due to the Coronavirus pandemic and are downgraded from last summer’s numbers when an 18% increase was predicted this year before the second wave of COVID hit the UK.

The 14% rise in 2021 follows an estimated contraction of 14.3% overall last year caused by the sharp downturn in construction during the first lockdown in 2020. Output is expected to recover to pre-COVID levels in 2022, and the CPA have stated ‘there is also the risk that once the furlough and self-employment support schemes end in April 2021, there may be a sharp rise in unemployment that could potentially dampen this recovery.’

Private housing was one of the quickest sectors to recover in 2020, with mortgage lending and property transactions above pre-COVID levels at the end of the year. Demand for private housing is due to moderate in 2021 after these policies end on 31st March 2021, then subsequently pick up again in line with the economic recovery throughout late 2021 and 2022.

CPA Economics Director Noble Francis said: “The long-term impact of COVID-19 on the structure of the economy will still remain.

“This continues to leave questions about the fortunes of certain construction sectors. This is most notable in the commercial sector, where there is still lots of uncertainty about the future of retail and office space.

“It will be crucial to observe how businesses change their operations as the vaccine is rolled out in the coming months and to what extent there is a ‘return to the office.’

“While the fortunes of some sectors have been tied to COVID restrictions and associated business and consumer confidence in the wider economy, infrastructure has largely escaped such uncertainty.

“Projects have been able to effectively enact safe operating procedures given the sector’s large construction sites that have been fewer different trades mixing than I most sectors.

“As such, infrastructure has been least-affected by COVID restrictions and output is expected to lift the whole industry over 2021 and 2022.

“Main works on HS2, Europe’s largest construction project, with offshore wind and nuclear projects are expected to be the main drivers of activity.”

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