Michael Ankers: half a million jobs lost.

Construction suffers worst fall in output since 1974

Published:  05 March, 2010

LONDON: The latest statistics published by the Office for National Statistics shows that construction output fell by over 11% in 2009 – the largest fall the industry has experienced in a single year since the time of the three-day week in 1974. 

Michael Ankers, chief executive of the Construction Products Association said: "The figures illustrate the dramatic impact of the recession on the construction industry. 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. It grew by 8% in 2009 compared with a collapse of 20% in spending by the private sector."

Mr Ankers said he believes that although the economy as a whole may be showing some tentative signs of recovery, the construction industry is facing another bleak year.

The CPA's latest 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 £18bn from its peak in mid 2008, a more rapid decline than in the recession in the mid-1970s.

"It is vital that after the General Election whichever party is elected looks very carefully at where it makes its expenditure cuts," he stated.

"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."

A recent report by LEK Consulting showed that for every pound spent on construction, £2.84p was generated in economic activity throughout the economy.

"We will be 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," said Mr Ankers.

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