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Rising oil price slows construction growth further

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SURGING OIL prices will slow global construction growth this year, a leading firm of construction economists warned this week.

The only region to escape will be the oil-rich Middle East, where high oil prices are expected to fuel the continuing construction boom, it said.

Davis Langdon's World Construction 2005-6 spending report predicts slow growth across Europe in 2006, with output forecast to rise by 2%.

British output is expected to lag behind with no expectation that growth will recover this year after falling by 0.5% last year.

Most of the Europe-wide slowdown is expected to result from a dip in the residential property market.

European civil engineering output is expected to rise, driven by infrastructure projects in central and eastern Europe.

The United States continues to top the list of countries that have spent the most on construction in the past year.

Its construction output of £566bn, is ahead of second placed Japan (£388bn) and third placed China (£277bn).

China had the fastest growing rate of spending last year.

But a Chinese steel production surplus has triggered a 30% drop in China's raw steel prices. This is expected to affect world prices in 2006.

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