The UK's construction sector is expected to grow in 2019 and 2020, according to new research.

The Construction Products Association's (CPA). latest Spring forecasts anticipate growth for the whole of 2018 will remain flat, before accelerating to 2.7% in 2019 and 1.9% in 2020 as major infrastructure projects start to get underway.

Infrastructure output is forecast to grow 6.4% this year and 13.1% in 2019 as main civil engineering work commences on large projects such as HS2, the Thames Tideway Tunnel and Hinkley Point C. Elsewhere in private housing, output is expected to rise 5% with demand for new build underpinned by the support of Help to Buy through to March 2021.

However, other areas such as the commercial sector are expected to continue their decline, with a post-EU Referendum fall in contract awards for new offices space since the second half of 2016 expected to translate into a fall in activity this year.

Overall, offices construction is expected to decline 20.0% in 2018 and 10.0% in 2019. The CPA said the impact of Carillion's liquidation will be felt on commercial PFI health projects, including the Midland Metropolitan Hospital and the Royal Liverpool Hospital, where work has been paused to reassign or retender contracts. Output in the PFI health sub-sector is forecast to fall 5.0% this year.


Noble Francis, Economics Director at the Construction Products Association, said: "The start of the year was a bad one for construction. Carillion, the UK's second biggest contractor, went into liquidation in January and led to an hiatus on infrastructure and commercial projects.

"The snowy weather badly affected work on site for at least three working days in February and March and, as a result, 2018 Q1 construction is likely to be £1.5 billion lower than in 2017 Q4. Fortunes for the industry overall will depend on the extent to which construction activity catches up during the rest of the year."

Continuing, Mr Francis said with a predicted 2.7% rise in activity this year driven by infrastructure and private house building, half of the activity lost in Q1 in expected to be regained during 2018.

"Work on some Carillion projects has already restarted, on joint-ventures or where major clients such as Network Rail have been keen to continue work," he said.

"Other projects will take time to retender but are still likely to restart this year. Large infrastructure projects should also allow for a catch-up after the adverse weather and often have penalty clauses for delays. Despite the sector's strong growth prospects, questions remain about poor government delivery of major infrastructure projects.

"Private housing starts are expected to rise 2.0% in both 2018 and 2019 in spite of the slowdown in the general housing market as Help to Buy is clearly sustaining demand for new build homes. Outside London, house building will rise quicker than this but growth overall will be constrained by the ongoing fall in demand for high-end residential in the capital.

"The growth in infrastructure and private house building this year is forecast to offset falls in the hard hit commercial sector, where Brexit uncertainty continues to hit international investment in new office towers in London and high street woes affects the construction of new retail."

(LM/MH)