NFB Conference 2013:
Construction Forecasts
DR. NOBLE FRANCIS
Economics Director
UK ECONOMY
Economic Recovery
• UK GDP is
recovering but what
about real wages?
• Interest rates to
stay low
• Inflation above
target
• Bank of England
clearly focused on
growth
OPPORTUNITIES GOING
FORWARD IN CONSTRUCTION
Total Construction
• £110 billion of work
• Opportunities going
forward, primarily in
London & South East
• Near-term growth
due to private housing
& infrastructure
• Medium-term
recovery also from
growth in commercial
Private Housing
• Q3 private housing
output 12% higher
than a year ago
180,000
25%
8.0%
160,000
10.0%
140,000
20%
15.0%
15%
Number of Housing Starts
Govt policy boosts:
• Funding for Lending
• FirstBuy
• Help to Buy
5.0%
19.0%
120,000
2.8%
100,000
10%
-7.3%
80,000
5%
60,000
0%
• What happens
when the policies
finish?
40,000
-5%
20,000
0
-10%
2011
2012
2013
2014
2015
2016
2017
Private Housing RM&I
• Real wages and
consumer spending
expected to boost
sector
0
16,000
1.0%
2.0%
14,000
3.5%
4.0%
4.0%
5.0%
-20
-5.8%
12,000
-40
£ Million
• Green Deal and
ECO are not
offsetting the end
of CERT & holding
back growth
18,000
10,000
8,000
-60
6,000
4,000
-80
2,000
0
-100
2011
2012
2013 (e)
2014 (f)
2015 (f)
2016 (p)
2017 (p)
Public Housing RM&I
• On the negative
side, government
spending cuts
8,000
0
2.6%
0.9%
1.4%
1.9%
0.6%
0.4%
7,000
-5.0%
-20
6,000
5,000
-40
£ Million
• On the positive
side, Green Deal
could make more
of an impact in the
public sector
4,000
-60
3,000
2,000
-80
1,000
0
-100
2011
2012
2013 (e)
2014 (f)
2015 (f)
2016 (p)
2017 (p)
Shortages?
Bricks in September:
• Production 14% higher than a year ago
• Stocks 34% lower than a year ago
Building contractors in Q3:
• 34% reported difficulty recruiting bricklayers
• 32% reported difficulty recruiting plasterers
For Further Information Contact:
Noble.Francis@constructionproducts.org.uk
www.constructionproducts.org.uk
@NobleFrancis