TOTAL construction output in the UK will grow by 30% between 2013 and 2018 according to new forecasts.
These figures are published in the latest edition of the quarterly Construction and Housing Forecast Bulletin, issued by AMA Research. Construction output is forecast to grow by around 6% in 2014 to around £129bn, underpinned by strong growth in the residential sector, with more moderate increases expected in the non-residential sector.
The outlook for the residential sector in the medium term remains positive with healthy rates of annual growth currently forecast until 2018. Residential new work output is forecast to increase by 36% between 2013 and 2015, stimulated by the recent extension of buying assistance schemes such as Help to Buy within the private sector and schemes to encourage investment in the rental sector such as Build to Rent. Housing starts and completions are forecast to show strong growth in the short term as consumer confidence and mortgage lending rates improve, with completions currently forecast to reach 200,000 by 2017.
Forecasts for the non-residential construction sector are also positive, with output expected to see annual growth rates of 4-5% in the medium term to reach a value of around £65bn in 2018. Infrastructure output growth should continue to be underpinned by large scale transport and electricity projects in the medium term, while output within the office and retail sectors are forecast to see more moderate growth rates. Output within the industrial sector is expected to remain volatile.
Andrew Hartley, Director of AMA Research, said, “Finally there are some genuine indications of recovery within the construction market. The residential sector in particular is experiencing strong growth at the moment, driven by increased mortgage lending rates and an upward trend in new house prices.”
Research estimates that construction output will increase at a rate of 5-6% per annum in the medium term, with output expected to represent a value of £158bn by 2018.