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Construction activity continues to slide

Construction output fell 15% in the second quarter of 2009 compared to the same period last year, despite fiscal stimulus money.

Figures from the Office of National Statistics show that construction output has continuted to slide, following record falls in the first quarter of 2009. Both the public and private sectors are experiencing falls, although non-housing and infrastructure showed increases of 26% and 7% respectively.

Chief Executive of the Construction Products Association Michael Ankers, said: “These latest output figures illustrate the impact of the recession on construction. With the industry accounting for nearly 10% of the country’s GDP, a continued decline in construction output will inevitably hold back any broader recovery in the economy as whole.

“With the construction industry experiencing its sharpest decline in output since the War, it is more important than ever that government maintains its capital investment programme to improve our transport infrastructure, education facilities and social housing.

“This would provide the platform on which we can build a long term economic recovery with a skilled workforce and better infrastructure, both of which are key to UK businesses becoming more competitive. Furthermore, this will also avoid further job losses in the construction industry.”   

Figures for industrial new build show a 38% fall compared to the same period last year, on top of a 52% fall in the first quarter compared to a year ago.

Commercial output fell by 28% in the second quarter of 2009 compared to a year earlier. New orders fell 51% during the first half of 2009 and, as a consequence, further falls in commercial output are anticipated over the course of 2009 and 2010.

Output in the public non-housing sector increased 26% in the second quarter of 2009 compared to the same quarter a year before, buoyed by work in education and health on programmes such as Building Schools for the Future and the Primary Capital Programme.

Infrastructure output rose 7% during the second quarter of 2009 compared to a year ago, primarily due to increases in investment in the rail sector and work on a few major roads projects.

Repair and Maintenance work, which accounts for 46% of total construction work, fell 16% compared to a year ago due to falls, in the main, in private sector repairs and maintenance on both residential and non-residential properties.

Public housing output rose 3% during the second quarter of 2009 compared to 2009 Q1. However, this is still 8% lower than during the second quarter of 2008 and disappointing given consistent announcements from government regarding stimuli for the social housing sector.

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