Growth in UK construction will slow significantly in 2005 after three exceptionally strong years, according to Experian\'s latest construction forecasts.

However, there is good news from the private commercial sector. Only a year ago office building was in the doldrums, but it is now bouncing back quicker than many anticipated and Experian expect to see robust increases in output to 2007, supplemented by buoyant demand from retailers for new and refurbished premises and some substantial leisure projects.

In 2004, construction growth was close to 4%, outstripping GDP for the third year in succession, with strong performances in new housing and public non-residential development while infrastructure and non-residential repair and maintenance work was in decline.

Construction output growth is forecast to slow to around 2% cent this year and even less in 2006, before picking up again to around 3% in 2007. That means construction output growth will be below the level of the growth of the economy in general this year and next, but will converge with it in 2007.

The slowdown is expected to come largely from housing, although Experian expect a soft landing rather than a crash, and the public sector. Public spending on school and hospital buildings has grown at 20% year-on-year for the past three years and that is not sustainable.