New work output in the construction industry will not return to pre-pandemic levels until 2027, according to the Building Cost Information Service’s (BCIS) quarterly data briefing.
Although total construction output has reached pre-pandemic levels, driven largely by growth in the repair and maintenance sector, new work output remains below 2019 levels and BCIS says the outlook ‘remains challenging’ due to the impact of Covid-19, Brexit and the war in Ukraine.
Dr David Crosthwaite, head of consultancy services at BCIS, said: “Our forecasts suggest new construction work output won’t return to pre-crises levels until late 2027 – that’s almost eight years of no real growth in the sector.
“Stagflation is a very real possibility, not only in our sector but across the wider economy. Little or no growth coupled with high inflation is a very poor environment for construction investment.
“The positive news is that it appears supply constraints are easing, leading to costs and prices stabilising in the long run. We think inflation has peaked and we could be over the worst of it – all eyes are now turning to the length and depth of recession.”
