Construction crippled by recession

Published:  14 May, 2009

UK: Construction is facing its sharpest decline on record. With no prospect of an improvement in the near term, output and employment are set to fall even further in 2009 and 2010, reports the Construction Trade Survey compiled by the by the Construction Products Association.

The survey, which covers the first quarter of 2009, provides no respite from the current recession, suggesting that the situation will deteriorate across the entire industry.

 

The decline endured in 2008 is set to be increased in 2009 with decreasing demand in the economy leading to unprecedented falls in output and employment within the construction industry.

The CPA also expects that the construction sector as a whole will fall 12.1% during 2009.

The private sector is expected to endure the worst falls of 20% in 2009 alone.

While 2008 saw private housing and industrial sectors suffering, 2009 is expected to see sharp falls in offices and retail newbuild. Private housing repair and maintenance also looks set to be hit hard.

All heavyside manufacturers and 91% of lightside manufacturers reported that sales had fallen. These are unprecedented results since the survey began, said CPA.

In the 12 months previous to this survey, 82% of lightside manufacturers stated that sales had risen.

Julia Evans, chief executive of the National Federation of Builders said: "We know from talking to our members that many are frustrated both by the difficulties they face in accessing pubic sector contracts and by banks refusing the necessary capital needed to operate.

"With private sector work opportunities hit hardest of all, government must encourage public sector clients to release work in a wider range of procurement methods.

"We need some smaller bundles or individual contracts let outside of over-large framework packages to ensure SME contractors are able to compete.

Key survey findings are:

62% of building contractors report that output fell in the first quarter, compared to the fourth quarter of 2008.

60% of contractors report that output will fall further in the next quarter.

100% of heavyside manufacturers reported that sales were lower than in the previous quarter.

56% of specialist contractors reported that order books fell in the first quarter of 2009. This indicated that output was likely to fall further near term. 

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