Cuts threaten construction sector recovery
Public spending cuts have hit confidence in the construction industry despite increasing activity, a survey had found.
The Markit/Chartered Institute of Purchasing and Supply index for June has found the sector grew during the month.
But firms were reluctant to recruit extra staff, despite the upturn, because of fears about the impact of public spending cuts and VAT rises.
David Noble, chief executive at the CIPS, said: ‘Although the UK construction sector maintained a steady pace of growth in June, question marks loom over the sustainability of this recovery in the longer-term.
‘The sector is bracing itself for another spell of troubled times following the public spending cuts and forthcoming VAT rises announced by the government last month.’
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: ‘The survey is the first indicator of the mood in the construction sector in the wake of the emergency Budget.
‘According to the report, activity in the sector continued to grow in June at a similar pace to May. Of more significance, however, was the forward looking expectations series which while remaining in positive territory suffered its biggest drop in the survey’s history.’
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