The distinct divide between a confident UK construction industry in the northern and central regions and a sluggish south is expected to continue through to 2005.

In its latest report, industry analyst Experian says the UK construction industry is in fine fettle. A 7% rise in new construction is expected to remain at around this level for the next two years.

The north is still seeing a boom in private housing construction, and although a slowdown is expected the sector will stay strong. The story is similar in the central region, although the slowdown might be swifter.

Uncertainty over supply and demand issues could hold housebuilders back in the south until solutions are found.

Overall steady growth of 8% per year is forecast for Britain in both 2005 and 2006.

James Hastings, associate director of Experian’s business strategies division, said high levels of government spending have bolstered the public housing and non-residential sectors, particularly in the north. But, he added, a tightening of purse strings before the election could cause the gap to close.

He predicts a return to similar growth among the regions due to a gradual pick up in commercial construction in the south, which has been constrained by the dormant offices market, and increasing levels of housebuilding to meet the shortfall in supply.