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Industry anticipates three years of growth

Government must honour spending promises if construction is to outperform UK's general economy

CONSTRUCTION growth is set to surge ahead of the general economy for four consecutive years for the first time in four decades.

Latest forecasts from the Construction Products Association show the industry building on last year's high growth rates for the next three years.

But the rosy predictions are dependent on the government sticking to its spending promises.

Association economics director Alan Wilen said: 'The industry should enjoy a sustained rise in output over the next three years with growth averaging 3.5 per cent per annum.

'This should begin to address the UK's historic under-investment which has seen the country languishing at the bottom of the European league for the quality of its built environment.

'The rise in output hinges on the delivery of the government's plans for greater investment in social housing, schools, hospitals and transport, with public sector growth averaging 7.6 per cent over the forecast period.

'This contrasts with private sector growth of only 1.5 per cent, a reflection of slower UK and world GDP growth.'

The figures highlight the slow progress still being made with spending on social housing.

Mr Wilen said: 'Local authorities have been slow to respond to the increased funding provision under the Comprehensive Spending Review.

'Only a small fraction of council home transfers programmed for 2001/2002 were completed by April. Accordingly, little progress is anticipated during the current year and the growth in public housing repair, maintenance and improvement forecast for 2003 and 2004 is dependent on local authorities deploying the increased funding and the delivery of a more effective transfer programme.'

Education and health-related work is expected to increase significantly alongside transport investment in both the Private Finance Initiative and traditionally funded sectors.