Construction Output expected to fall significantly in 2023 amid looming UK Economic Recession
Headlines from the Construction Products Association (CPA) forecast a reduction in construction output of 3.9% in 2023 (compared to a rise of 2.0% in 2022).
The CPA cite this as “mainly due to the impact of a wider economic recession, exacerbated by the effect of the ‘Mini Budget’, and the consequent fallout from recent political uncertainty.”
Construction Outlook: October 2022
Hewes & Associates forecast the decline of Construction Output in 2023 to be 5% and, state “Tighter public spending, higher inflation, and in turn raised base rates will be the new reality in our view. Efforts to control inflation will, we expect, result in base rates rising to around 4%, while inflation is forecast to peak in 2023, and drop to around 4-5% by 2024.”
They also predict a housing downturn in 2023/2024 due to high borrowing rates, pressure on household incomes and low economic confidence, although “we do not foresee another round of austerity of the likes undertaken over the years 2010-2015”
Some of the levers affecting these predictions: