Bracing for Change: UK Construction Sector Faces 2.2% Downturn in 2024

The UK construction sector is bracing for a challenging period, with the Construction Products Association (CPA) forecasting a significant downturn. The industry is expected to see a contraction of 2.2% in 2024, marking a sharper decline than initially anticipated.

This downturn stems from a combination of economic pressures including high mortgage rates and a sluggish economy, which have dampened demand across key sectors such as private housing and repair, maintenance, and improvement (rm&i).

The decline in construction activity is especially pronounced in the private housing sector, which has been hit hard by rising mortgage rates and regulatory challenges. These factors have significantly reduced housing demand, with private housing output anticipated to fall further.

However, there is a silver lining as forecasts suggest a gradual recovery beginning in 2025, with an expected increase of 2.0% in construction output, supported by a slight easing in interest rates and overall economic conditions.

Infrastructure projects like HS2 and the Thames Tideway Tunnel continue to bolster the sector, although delays and budget overruns are affecting some government projects, impacting overall confidence in the industry's near-term prospects.

Overall, while the construction industry faces a tough couple of years ahead, there is cautious optimism for a recovery starting in 2025, aligning with a broader economic upturn and improved financing conditions (Construction Products Association) (Construction Enquirer) (SpecFinish magazine).