Construction prospects receive a cash boost
THE first construction output forecast incorporating the increase in government expenditure announced in the recent Comprehensive Spending Review has been published by the Construction Products Association.
The forecast for the next three years anticipates a period of steady growth for the construction industry, with output set to grow by 2% during 2000, 2.5% during 2001 and 3% during 2002.
Road investment during 2000 is expected to rise slightly from recent poor levels, and double-digit growth is forecast for 2001 and 2002 as the Government's Transport Plan releases additional funds, especially for maintenance expenditure.
The CPA says it does not forecast a boom for the construction industry, but rather a period of steady and sustained growth which will be underpinned by the additional government funding announced in the CSR. Nevertheless, the 3% projected growth in total construction output in 2002 will see the industry growing more quickly than the UK as a whole for the first time since the 1980s.
Commenting on the forecast, CPA president Roy Harrison said: 'Public investment in the built environment is long overdue. For too many years the proportion of GDP invested in the UK's infrastructure has been the lowest in Europe and this additional funding will at last start the long process of catching up with our European colleagues.'
However, he warned the industry not expect to many immediate effects, as government spending will only begin to feed through into construction output towards the end of the three-year period of the forecast.
'The Government needs to develop specific proposals as soon as possible so that the necessary steps can be taken to ensure that projects are implemented within the timeframe set in the CSR,' he said. 'With this kind of forward planning, and the construction products industry's commitment to the development of innovative and sustainable products and services, there is no doubt that the industry can meet these increased demands.'
