Construction suffers worst fall in output since 1974

5 March 2010

The latest ONS statistics show that construction output fell by over 11 per cent in 2009 – the largest fall the industry has experienced in a single year since the time of the 3day week in 1974. Commenting on these figures, Michael Ankers, Chief Executive of the Construction Products Association said:

'Today's figures illustrate the dramatic impact of the recession on the construction industry in which some experts estimate up to half a million jobs have been lost over the last two years. The only thing that has prevented the industry from suffering an even more dramatic downturn has been the continued high level of public spending on construction which grew by 8 per cent in 2009 compared with a collapse of 20 per cent in spending by the private sector.

'Whilst the economy as a whole may be showing some tentative signs of recovery, the construction industry is facing another bleak year. The Construction Products Association's latest forecasts are that output will fall by another 3 per cent in 2010 with private sector investment on commercial and industrial projects continuing to be very weak and declining by a further 13 per cent. On this basis by the end of 2010 the industry will have fallen by £18 billion from its peak in mid 2008, a more rapid decline than in the recession in the mid 1970s.

'It is vital that after the Election whichever party is elected looks very carefully at where it makes its expenditure cuts. Through improved infrastructure, energy supply, and better education facilities, the industry can provide the very things that the country needs to grow the economy again. In doing so a recent report by LEK Consulting showed that for every £ spent on construction, £2.84p is generated in economic activity throughout the economy. We are therefore pressing the major parties to commit to a sustained level of construction spend at 2.25 per cent of GDP throughout the life of the next Parliament.'

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