A slowdown in construction sector growth is being predicted by the Construction Products Association (CPA) as risks continue to rise.

The association has downgraded its growth forecast to 3.0% (from 3.6%) during 2016 and 3.6% in 2017. It says this is due to heightened concerns regarding the effects of slowdown in global economic growth prospects, the 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.

Private housing starts are expected to rise by 5.0% in both 2016 and 2017. New offices activity is anticipated to increase by 7.0% in 2016 and 6.0% in 2017, while retail construction is expected to fall by 1.0% in 2016 and rise by just 2.0% in 2017. Warehouses activity is forecast to increase by 23.7% by 2019 and infrastructure work is anticipated to rise by 56.3% by 2019.

CPA economics director Professor Noble Francis (pictured above) said: “The latest forecasts for construction are 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.” 

He continued: “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.” 

However, despite these substantial risks, the CPA is anticipating growth in the three largest construction sectors; private housing, commercial and infrastructure.