Construction industry output exceeded £14 billion (#17.89 billion) in 2000, a 10 per cent increase, says the Construction Industry Federation.

The performance was significantly ahead of the economy, which grew by an estimated 8 per cent as a whole. Since 1995, its contribution to GNP has increased to around 20 per cent from 14 per cent. The sector's outlook in 2001 is for a further 7 per cent growth in volume. Public sector investment will be particularly strong in 2001, with 14 per cent growth forecast based on the financial allocations in the public capital programme, the CIF said.

Overall, the civil engineering sector experienced strong growth in 2000, according to the federation. Expenditure on sanitary services was up 25 per cent in volume. This contrasted with road investment where volumes are not expected to have increased over 1999 levels.

In 2001, new civil engineering work should show a 12 per cent increase, reflecting strong increases coming through the public capital programme, particularly in roads where funding has increased to £892 million in 2001 from £622 million. This should translate into a volume increase of more than 30 per cent in 2001, says the federation. It had forecast housing output of 50,000 units in 2000. Based on the returns for the first nine months, it said this was still achievable. But while private housing output was running at 9 per cent ahead of 1999, the provision of social housing was running at 12 per cent below 1999 levels in the first nine months, it said.

There has been a significant reduction in HomeBond registrations, a measure of housing starts, in the second half of the year, indicating a dramatic slowdown in supply rate. This is due to a lack of credibility and clarity over the social and affordable housing provisions of the Finance Act 2000, says the CIF.

In the general contracting sector, public sector investment continued to grow rapidly - up about 26 per cent in 2000. After exceptionally strong growth of more than 20 per cent per annum over the past five years, private sector funded work grew by a more modest 8.5 per cent. But the commercial/retail sector had 15 per cent growth, while the industrial and tourism sectors grew by 5 per cent and 4 per cent respectively. Investment in the agricultural sector remains in decline.

The general contracting sector is expected to expand by a further 7 per cent in volume in 2001. Publicly funded work should translate into volume growth of 7 per cent based on public capital programme allocations, says the CIF. Investment in tourism is expected to have peaked in 2000 after four years of strong growth, with the federation forecasting a contraction of 10 per cent in this sector. But investment in the industrial and commercial sectors should hold at 15-17 per cent.