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The trade association predicts that growth will return in 2014, but output that year will be 12% lower than at its peak in 2007.
The latest downgrade in forecasts is attributed primarily to private investors being concerned about the stability of the euro.
CPA chief executive Michael Ankers said: “For the construction industry to return to growth there needs to be a strong private sector recovery, but this is just not happening. Continuing uncertainty about the future of the euro zone and a lack of consumer confidence in the UK are holding back important investment decisions. As a result the largest area of construction activity - private commercial work - is forecast to fall by a further 5% in 2012 and remain at that level in 2013.
“At the same time the cuts in public sector construction activity are really beginning to bite, with construction work on schools, hospitals, and other non-housing work forecast to fall by 23% compared with 2011. Despite the encouraging announcements on public sector investment on infrastructure projects in the Autumn Statement, capital spending on construction will still fall 30% by 2013.”
Private sector housebuilding is expected to continue its slow recovery, but in the short term this is more than offset by the sharp fall in public sector housing. As a result the number of new homes started in 2012 is forecast to be around 108,000 - some 5,000 fewer than in 2011.
Other key findings in the latest forecasts include:
- Public Sector construction to fall 18% between 2011 and 2014
- Education construction to fall by 25% in 2012
- Health construction to decrease 15% in 2012
- Infrastructure construction to rise 20% by 2015
- Energy construction to increase threefold by 2015.
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