The government’s capital budget cuts will ensure construction industry output will fall by 4.5 per cent, according to a report.
Lawers Pinsent Mason and management consultants PricewaterhouseCoopers also said nearly 100,000 more jobs will be lost throughout the sector by 2014-15.
Mergers and firms going bust will become more prevalent, although this is likely to create a leaner, more profitable industry, insisted their report, which was compiled after a series of meetings with industry bosses.
The conclusion is that construction companies need to become more “efficient” in order to survive the economic crisis.
PricewaterhouseCoopers’s Chris Temple said: “The spending review will make or break the construction sector. It is inevitable that the recession and reduced capital spending by government will give rise to casualties. There are a number of areas where construction companies must, as a matter of priority, respond decisively.
“The spending review focuses urgent attention on a number of long-running themes and trends that have created barriers to greater efficiency in the UK construction sector. Only those businesses that are able to drive innovation and change are likely to survive and prosper.”