Construction re-enters recession in Q1 with further falls expected

Published:  26 April, 2012

LONDON: This week's figures from the Office of National Statistics for GDP in the first quarter of 2012 show that the UK economy and construction industry returned to recession with a fall of 0.2% fall and 3% respectively.

Commenting on these figures, Noble Francis, Construction Products Association economics director said: "Given the sharp effects of public sector spending cuts over the past 12 months it is unsurprising to see that construction returned to recession in the first quarter with a fall of 3% following the 0.2% fall in Q4. With new orders for construction falling 14% in 2011, the industry is likely to endure further falls near-term. Our latest forecasts for construction anticipate that the industry will fall considerably this year and remain flat in 2013, severely delaying recovery for the economy as a whole."

"Given that independent economic analysis has shown that for every pound spent in construction, £2.84 is generated for the wider economy, it is essential that government does its utmost to switch its current spending towards the more productive capital spending."

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