Construction output forecasts for 2016/17 have been revised downwards due to the effects of a "slowdown in global economic growth prospects", the Construction Products Association (CPA) has announced.

The CPA has forecasted a 3% growth for 2016 and 3.6% rise in 2017, a downward prediction from 3.6% three months ago.

The organisation said the revised figures are a result of a number of factors, including a global economic growth slowdown, impacts of uncertainty from the upcoming EU referendum on investor uncertainty and the potential for growth in the industry given key issues around skills shortages.

However, starts on new private housing is expected to increase 5% in both 2016 and 2017, while new office activity is forecasted to rise 7% in 2016 and 6% in 2017.


While retail construction is anticipated to fall 1% in 2016 and only rise 2% in 2017, warehouse activity is expected to increase 23.7% by 2019 with infrastructure work predicted to rise 56.3% during the same period.

Professor Noble Francis, Economics Director, said the new forecasts as "still positive".

"With growth of 3.0% in 2016 and 3.6% in 2017, activity in the construction industry is expected to outpace growth in the wider UK economy.

"The risks to this growth, however, continue to rise.  UK economic growth forecasts continue to be downgraded in light of poorer global economic growth prospects.

"In addition, the months leading up to the EU referendum in June will inevitably see a drop off in investment as increased uncertainty leads nervous investors to adopt a ‘wait and see' policy until the referendum is out of the way, which could have a significant impact on UK economic growth and the construction sector in particular.

"Despite these substantial risks, the CPA are anticipating growth in the three largest construction sectors; private housing, commercial and infrastructure."

(LM)