UK Construction Industry Safe During Recession

11 January 2008 (Last Updated January 11th, 2008 11:09)

The UK construction industry could see growth this year, even with warnings of a recession, thanks to strong demand in the commercial sector, according to the Construction Products Association. The construction industry is usually one of the first sectors to show signs of a recession, b

The UK construction industry could see growth this year, even with warnings of a recession, thanks to strong demand in the commercial sector, according to the Construction Products Association.

The construction industry is usually one of the first sectors to show signs of a recession, but will instead enjoy forecast growth of just above one percent.

Construction Products Association chief executive Michael Ankers says the fall in private housing jobs has helped save the industry, though figures are still expected to be down on last year's growth rate of 2.6 percent.

"The economic backdrop against which these forecasts have been prepared is more uncertain than for many years and there was a time when the construction industry was the first to suffer in such a situation," Ankers says.

"What we are seeing, however, is the fall in private housing – both new build and repair and maintenance – over the next couple of years, balanced by continued growth in the commercial sector on the back of major schemes that are already underway."

Major projects such as the London Olympic Games and the Stratford City Development, as well as increased government investment in schools, have provided the industry with a safe haven in an unstable economic environment, according to the association.

But the forecast is not all good.

"Looking further ahead to 2010-2012, the prospects for the commercial sector are less bright as investors cut back in response to the large amount of commercial space that will become available following significant investment in recent years," Ankers says.

The housing market is expected to recover in this time though, and Crossrail and the M25 widening scheme will provide new opportunities for the industry.

By Penny Jones