Construction 'key' as UK enters double dip recession
The construction industry holds the key to kickstarting the faltering economy, according to leading industry figures.
The claim came as the Office for National Statistics confirmed that the UK had entered a ‘double-dip recession’ after gross domestic product fell for the second consecutive quarter.
Figures from the ONS also showed that the construction industry has fallen into recession after a drop of 3 per cent in productivity in the first quarter of 2012, following a 0.2 per cent fall in the last quarter of 2011.
Noble Francis, economics director at the Construction Products Association, said it was ‘unsurprising to see’ the industry re-enter recession because of the effects of the government’s public sector cuts.
‘Given that independent economic analysis has shown clearly 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,’ added Mr Francis.
The Federation of Master Builders called for the government to stimulate the construction business claiming it was the key to economic recovery.
‘The government will find it very difficult to get sustained growth in the economy while the construction industry remains depressed,’ said Brian Berry, chief executive of the FMB. ‘Construction is essential to the wellbeing of the wider economy because of the variety and quantity of jobs it creates from apprentice bricklayers to world leading architects.’
He added: ‘The construction industry holds the key to recovery which is why the government needs to invest in capital projects rather than just focusing its attention on budget cuts’
Mr Berry proposed a range of measures to boost the industry, including VAT cuts and the opening up of the procurement process to smaller firms.