- 18th July 2016
Growth in construction market downgraded
The forecasted growth in the construction market has been downgraded by Experian.
A new set of forecasts by Experian have downgraded the prospects for growth in the construction industry for 2016.
Three months ago the forecast stood at 2% but now has been cut quite considerably, down to 0.3%. What’s interesting about this data is that it was calculated before the results of the UK EU referendum were made public, on the assumption that the UK would remain part of the EU.
The figures will be next be revised in the autumn publication, however Experian predicts the confirmed Leave result will worsen the outlook. Experian said, “this [the Leave vote] is currently unquantifiable, but is almost certain to be negative”.
Experian have explained the revised figures are due to a global economic slowdown over the past few months, which affected the economy “even without the impact of the referendum vote”.
This has also downgraded Experian’s growth forecast for 2017, from 2.9% (Apr ’16) to 1.7% (Jul ’16).
Experian have highlighted potential eventualities in specific cases:
Infrastructure: lower tax take from both businesses and individuals could lead to reductions in funding for Highways England, Network Rail and others over the medium to long-term.
Housing: there is a possible downward adjustment in house prices which may impact house builders’ programmes.
Economic: fall in the value of sterling will mean higher inflation and may mean higher exports, which may provide impetus for factory construction.
Commercial: potential relocation of banks and financial services institutions moving away from London towards centres remaining within the EU, impacting demand for office space in the capital.
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