The East Midlands construction industry will continue to face tough challenges in the year ahead, according to latest figures published today by the Construction Skills Network (CSN). Growth in the region is not expected  to return until 2013 but the longer term outlook for the industry is more positive with a slow but sustained period of recovery forecast.

The annual CSN report, produced by CITB-ConstructionSkills, the Sector Skills Council and Industry Training Board for the construction industry, shows that construction output in the East Midlands is expected to rise at a rate of just 1% per year over the next five years to 2016, putting it towards the bottom of the growth table for the UK regions and devolved nations, and falling below the national figure of 1.4%.

Construction employment in the East Midlands is expected to continue its decline until 2014 before starting to rise in 2015, when demand for workers  is expected to increase in line with growth in the more labour-intensive Repair & Maintenance sector. Employment is set to reach 152,770 in 2016 - 17% down on its 2006 pre-recession peak - but 2.6% higher than its projected level for 2012.

The largest increases for the region in construction-specific employment are expected for surveyors, logistics personnel, and painters and decorators, with logistics personnel likely to be the most in demand.

Increased concern over carbon emission reduction targets, along with rising energy costs, is likely to increase levels of retrofitting, energy efficiency measures and microgeneration technologies, which will become increasingly important in driving construction growth in the East Midlands over the longer term.

Amanda Sergeant, CITB-ConstructionSkills' Sector Strategy Manager for the East Midlands, commented: "While the overall picture is quite bleak, it's important to remember that there  is forecasted growth in skilled sectors such as industrial construction, private housing, logistics and energy efficiency. There is a real need therefore, to ensure that we have the skilled workforce in place to meet the demandin these areas. It's vital that the industry continues to invest in skills and training to be able to take advantage of the opportunities that will arise.

"The construction industry is key to the UK economic prosperity, and with this in mind CITB-ConstructionSkills will be working with construction employers to add value during these tough times, ensuring the delivery of growth locally and nationally."

At a UK national level the outlook for the construction industry over the next five years will remain extremely challenging - with growth expected to be slow and uneven. The early part of the forecast period is predicted to be particularly bleak with a 3% fall in output during 2012 and little sign of growth until 2013 when output is expected to bounce back by 4%. Over the medium-term growth is then set to fall back slightly before settling into a period of slow and steady growth, albeit below previous long-term trends.