Economists at the Construction Products Association (CPA) predict that output will fall by 2.2% this year. In its last quarterly forecasts, in January 2024, the CPA was forecasting a 2.1% decline for this year.

The downgrading from 2.1% to 2.2% is attributed to a weak start to the year following heavy rainfall.

However, growth will return in the next year, the CPA predicts. Its forecast for 2025 has been improved modestly from 2.0% three months ago to £2.1% today. Looking ahead to 2026, further growth of 3.6% is forecast.

For the different sectors of the industry, however, experiences are bound to vary.

In private housing, the largest construction sector, mortgage approvals and property transactions have begun rising from the low of last year and the increasing prospect of interest rate and mortgage rate cuts heading into summer has underpinned increased optimism in recent months.

Nevertheless, this is unlikely to translate into a pick-up in housebuilding overall this year, given that output in the first quarter was significantly lower than a year earlier.

The CPA forecasts that output will fall 5.0% in 2024, with stronger UK economic growth, combined with real wage increases and lower mortgage rates driving a return to growth of 5.0% in 2025.

Contractors working in private housing repair, maintenance & improvement (RMI), the second-largest construction sector, also continue to face a subdued environment.