Brexit uncertainty cuts construction forecast in half

21-01-2019

The Construction Products Association has cut its forecast for output in 2019 in half on the back of continued Brexit uncertainty.

Output will now increase 0.3 per cent this year, down from the 0.6 per cent it forecast in its autumn report released in October. Growth for 2020 has also been cut from 1.9 per cent to 1.6 per cent.

The new forecast is based on a no deal Brexit being averted.

CPA economics director Noble Francis said: “Our latest construction forecasts are conditional on either a revised Brexit withdrawal being agreed with the EU and getting through parliament or a delay to Article 50.”

Commercial construction is set to face the biggest blow with office construction forecast to drop 20 per cent and retail work to drop 4 per cent in 2019.

Output in the infrastructure market is more promising with a forecast rise of 8.8 per cent in 2019 and a further 7.7 per cent in 2020.

Prof Francis said: “Infrastructure is still expected to be the main driver of construction activity in both 2019 and 2020.

“The forecast growth in infrastructure is due to main work on major projects such as Hinkley Point C, the first new nuclear power station in over 20 years.”

He added that the infrastructure market could perform better than expected, however.

“If the government can improve its delivery of major infrastructure projects, then construction output could outperform our forecasts in spite of Brexit uncertainty,” he said.

“However, it is a big ‘if’.”

The gloomy outlook for the UK contrasts with Ireland’s construction market which could see output jump 20 per cent in 2019, according to Aecom.

Source: Construction News