UK construction figures tumble

By Sandy Guthrie25 January 2011

A sharp drop in UK construction output in the final quarter of last year is raising concerns about the impact on construction of the downturn in the wider economy.

UK government figures from the Office for National Statistics revealed that construction output fell by -3,3% - the largest fall since the height of the recession in early 2009.

Michael Ankers, chief excecutive of the UK's Construction Products Association, said, "After two quarters of relatively strong growth in the middle of 2010, these latest figures show that the economic recovery has stalled even before the full impact of the public sector spending cuts is felt.

"Although the poor weather in the last few weeks of the year undoubtedly had an impact on the construction industry, as it did in 2009, it is clear that the recovery in the construction industry has already petered out and that private sector growth is not coming through strongly enough."

He said that the Construction Products Association was forecasting that UK construction output would fall a further -2% in 2011, adding that this would inevitably hold back the pace of recovery in the wider economy.

"It is essential that the government does more to encourage a private sector-led recovery by accelerating the measures it is taking to reduce the burdens on business, encouraging the banks to make more money available for viable business investment, and implementing the measures it is committed to for improvement to the infrastructure of this country.

"It also needs to ensure that its broader policy objectives on localism help stimulate rather than hinder economic growth."

The impact of UK government spending cuts and continued concerns over access to finance have already led to suggestions that sentiment in the construction industry was turning increasingly negative during the third quarter of 2010, according to a UK Construction Market Survey from RICS (the Royal Institution of Chartered Surveyors).

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