Builders’recession to enter fourth year

Small to medium sized building firms are set to begin a fourth year of falling workloads according to the latest State of Trade survey from the Federation of Master Builders.

One-third of companies questioned are expecting to cut staffing levels this year as well in order to cope.

FMB director-general Richard Diment said: “The construction sector has still not reached the bottom of the most savage recession for the industry in living memory. Cuts in government expenditure are making matters worse with more than half of building companies reporting falling levels of work in public repair and maintenance work. Our survey shows a sharp increase in those expecting workloads to contract once again in the first quarter of 2011.”

“The Government is pinning its hopes of economic recovery on the creation of new jobs in the private sector but its policies are having exactly the opposite effect in the building sector. The increase in the rate of VAT earlier this month will cost the construction sector nearly 7,500 jobs this year alone. Cuts in public sector spending on social housing are having a particularly adverse impact with nearly half of building companies reporting that work in this sector had fallen.

“The construction sector has the potential to build Britain out of recession and we know that for every £1 spent on construction output generates a total of £2.84 in total economic activity. If this could be coupled with expenditure on infrastructure projects as well as tackling the growing housing crisis the Government would be building the real foundations for a sustained economic recovery.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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