Construction growth will not be sustained

Published:  27 July, 2011

UK: Modest growth in construction seen in today's GDP figures will not continue said the Construction Products Association.

GDP figures show that construction output grew half a percent in the second quarter of the year after falling in each of the previous two quarters. But all indications are that this will not continue according to the CPA.

Michael Ankers, the organisation's chief executive, said: "Growth in private sector construction has finally begun to recover and although public sector construction output remains stronger than we had anticipated it is clear that the impact of the public sector spending cuts is still to be felt and is forecast to cause sharp falls later this year.

"These public sector cuts will begin to hit the construction industry in the second half of the year. With the continuing economic uncertainty and falling consumer and business confidence, we are forecasting that construction output this year will be slightly lower than in 2010."

The CPA expects private sector recovery will be insufficient to offset falls in public sector spending and output next year is expected to be 2.5% lower than in 2011.

Construction work is focused in the South East with activity in other parts of the country falling more quickly.

"We are looking to government initiatives such as the Green Deal to help stimulate the industry, retain construction employment across the country and help the wider economic recovery," Mr Ankers stated.

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