04 Feb 2021
Construction to grow by 14% in 2021
Construction industry forecasters predict a hefty 14% rise in construction output this year, and another 4.9% in 2022.
Experts from the Construction Products Association (CPA) say they believe construction will follow a ‘W’-shaped pattern of recession and recovery.
Taking the second wave of COVID and the current lockdown into account, the CPA has actually downgraded its predictions since last summer, when it predicted an 18% rise for 2021.
The 14% rise would still pretty much cancel out last year’s estimated 14.3% contraction, most of which was caused by the first lockdown.
However, this means it’s likely to be 2022 before we see a full recovery to pre-COVID levels; the ending of furlough and self-employment schemes in April could further damage recovery, leaving the industry with more than just 0.3% to make up at the end of the year.
In 2020, the private housing sector made one of the fastest recoveries in the industry, with property transactions and mortgage lending actually higher than pre-COVID levels by the start of 2021.
Again, the end of furlough and self-employment on March 31 is likely to put the brakes on this rebound, which should then pickup again in line with the wider economic recovery in late 2021 and into 2022.
Noble Francis, the Economics Director of the CPA, said COVID’s long-term impact on the structure of the economy means there are still question marks around some construction sectors’ fortunes, especially the commercial sector, where uncertainty is rife about the future of office and retail space.
It will be impossible to make fully accurate predictions for this sector until after the vaccine has been rolled out and businesses have made decisions on the long-term future of home working or hybrid working versus returning to the office.
However, infrastructure has mostly escaped the uncertainty other sectors have suffered over COVID restrictions and the loss of consumer and business confidence in the economy. Given the large construction sites and limited mixing of trades in the sector, infrastructure projects have been able to go ahead safely, leaving infrastructure the least affected sector. Its output is predicted to lift the entire industry over 2021-22.
The main drivers of activity are expected to be offshore wind, nuclear projects, and main works on Europe’s biggest construction project, the HS2 high-speed railway.