Construction suffers worst output fall for 35 years

Figures from the Office of National Statistics that construction output fell by over 11% in 2009 – the largest single year fall since the three-day week in 1974.
Construction output in the fourth quarter of 2009 was £24.4 bn against quarter 3’s £24.6 bn. The third quarter’s figures grew by almost £600m largely on the back of repair and maintenance work.

However, RMI work fell 9% in quarter four, while new work grew 5%, largely down to increases in house-building.

Michael Ankers, chief executive of the Construction Products Association said: “The figures illustrate the dramatic impact of the recession on the construction industry in which some experts estimate up to half a million jobs have been lost over the last two years. The only thing that has prevented the industry from suffering an even more dramatic downturn has been the continued high level of public spending on construction which grew by 8% in 2009 compared with a collapse of 20% in spending by the private sector.

“Whilst the economy as a whole may be showing some tentative signs of recovery, the construction industry is facing another bleak year. CPA forecasts are that output will fall by another 3% in 2010 with private sector investment on commercial and industrial projects continuing to be very weak and declining by a further 13%. On this basis by the end of 2010 the industry will have fallen by £18 billion from its peak in mid 2008, a more rapid decline than in the recession in the mid 1970s.

“It is vital that after the Election whichever party is elected looks very carefully at where it makes its expenditure cuts. Through improved infrastructure, energy supply, and better education facilities, the industry can provide the very things that the country needs to grow the economy again. We are therefore pressing the major parties to commit to a sustained level of construction spend at 2.25% of GDP throughout the life of the next Parliament.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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