NFB Conference 2013:Construction Forecasts

DR. NOBLE FRANCISEconomics 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

• £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

Total Construction

• Q3 private housing output 12% higher than a year ago

Govt policy boosts:

• Funding for Lending

• FirstBuy

• Help to Buy

• What happens when the policies finish?

2.8%

-7.3%

19.0%

15.0%

10.0%8.0%

5.0%

-10%

-5%

0%

5%

10%

15%

20%

25%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2011 2012 2013 2014 2015 2016 2017

Num

ber

of H

ousing

Sta

rts

Private Housing

• Real wages and consumer spending expected to boost sector

• Green Deal and ECO are not offsetting the end of CERT & holding back growth

1.0%

-5.8%

2.0%3.5%

4.0%4.0%

5.0%

-100

-80

-60

-40

-20

0

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2011 2012 2013 (e) 2014 (f) 2015 (f) 2016 (p) 2017 (p)

£ M

illio

n

Private Housing RM&I

• On the negative side, government spending cuts

• On the positive side, Green Deal could make more of an impact in the public sector

2.6% 0.9%

-5.0%

1.4% 1.9% 0.6% 0.4%

-100

-80

-60

-40

-20

0

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2011 2012 2013 (e) 2014 (f) 2015 (f) 2016 (p) 2017 (p)

£ M

illio

n

Public Housing RM&I

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

Shortages?

Noble.Francis@constructionproducts.org.uk

www.constructionproducts.org.uk

@NobleFrancis

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