Sharp drop in public sector work adds to construction woes
Published:  17 July, 2012

UK: The latest ONS construction figures released today highlight that output fell 6% in May compared to a year earlier and, overall, the outlook for construction during 2012 appears grim.

Commenting on the figures, Noble Francis, economics director at the Construction Products Association, said: "Private commercial, the largest construction sector, continues to be the key bright area of construction. Commercial output in May was 2% higher than a year ago and in the first five months of the year was 1.3% higher than one year ago. However, this is not enough to offset the public sector cuts and, overall, in the first five months of the year, construction output was 5.4% lower than a year earlier so prospects for the year as a whole are bleak.

Although the coalition has consistently made pronouncements of boosting UK construction and the economy, there is little sign of this in reality. Public sector housing output in May was 23% lower than a year earlier and in the three months to May was also 23% lower than a year earlier. Public non-housing output, which primarily covers education and health construction, during May was 20% lower than a year earlier and in the three months to May was 22% lower than a year earlier.

"If government is serious about recovery in UK construction and the economy, it needs to focus on getting a replacement for PFI sorted out immediately, getting work on the ground now by focusing on repair and maintenance and ensuring that the Green Deal becomes a success by giving householders greater incentives to invest in energy-saving improvements."

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