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The Olympic build will undoubtedly continue to be the most high profile construction project in the UK between 2008 and 2012. Preparation for the Games is just one of a number of large construction programmes contributing to the continued growth of the industry over the next five years. In fact, across the UK we forecast we will see a peak in activity in 2011, followed by a year of little or no growth in 2012 with the completion of the Olympics build and related work. The underground Victoria Line, East London Line and Docklands Light Railway expansion work, although not taking place specifically for the Olympics, have been scheduled for completion to coincide with the Games, to ensure the London Transport System is ready to deal with the a anticipated increase in volumes of visitors to the capital. Similarly, work on the widening of the M25 will be suspended in order to avoid disruption to the influx of visitors to London during 2012.

Project activity

Other projects taking place across the South East over the forecast period, such as Thameslink, Heathrow Terminal East and Crossrail, are also contributing strongly to the continued shift in construction growth from North to South. We are also currently seeing a strong period for office development in London; however, due to the cyclical nature of this type of work and the timescales for completion of other large projects in the South of England, we expect this trend to tail off beyond 2011.

After several years of strong growth, other regions and nations across the UK will also see a slowdown in 2012, as a number of large construction projects wind down. In Scotland, for example, we are likely to see the level of construction activity remain static towards the end of the forecast period, due to the nature and timing of upcoming projects. The sector creating the most significant growth in construction output over the forecast period is infrastructure at 5.7% per year, which is continuing the resurgence begun last year. A number of large projects are now underway, including the cluster of activity in the South East, the £3bn Transport Investment Programme in Scotland and the redevelopment of Birmingham New Street station.

Output growth

The Northern Ireland Executive has also committed to a significant level of investment in infrastructure over the forecast period. The forecast slowdown in 2012 is a major contributor to the lower construction output growth of 1.7% per year over the period 2008-2012, compared to the 2.6% average annual growth projected for the period 2007-2011. Similarly, we expect to see employment levels peak in 2011 – employment is expected to increase by 7% in total over the forecast period to meet demand. There will be a particular need for Construction Professionals and Technical Staff (12,000 per year), Wood Trades and Interior Fit-out Specialists (12,850) and Electrical Trades and Installation (10,000). In real terms, by 2012, output growth across the construction industry will have risen by a third since the start of the decade.

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