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Construction faces "slow recovery"

It will take years for the construction industry to return to growth, with thousands more jobs set to be lost before a long and slow recovery begins, according to an industry report.

New figures from the Construction Skills Network (CSN) forecast a slow return to growth for the construction sector for the 2010 to 2014 period. Government and public sector funders are being urged to provide a sustained approach to public sector construction investment

Construction output was cut by an estimated 13% in 2009, said the Construction Skills Network.

Predicted total job losses between 2008 and 2010 are expected to reach 375,000, and will recoup by less than 100,000 by 2014.

“The industry needs to act now to avoid the long term skills shortages which were faced after the 1990s recession.”

Sandra Lilley, CSN

The CSN report also warned of marginal output declines for this year, and predicted that consistent “slow and steady” recovery would not begin until 2011. Over the whole of the 2010 to 2014 period construction output is expected to average 1.7% growth each year.

Scotland, Wales, the East Midlands and East of England are expected to have the strongest output in the 2010-2014 period.

However, the report said the private sector has borne the brunt of the recession. Public non-housing work such as the Olympics and the Building Schools for the Future programme saw good growth in 2009 and are likely to provide a significant stream of work in the short term through to 2011.

CSN manager Sandra Lilley said: “The industry needs to act now to avoid the long term skills shortages which were faced after the 1990s recession.”

The situation remains fragile

ConstructionSkills chief executive Mark Farrar said the situation remains fragile. “The recession has hit construction extremely hard and the forecast recovery is likely to be long and slow,” he said.

“We are concerned that, given the scale of the public sector deficit, potential funding cuts in the period ahead will further exacerbate the loss of skills before private sector investment has fully recovered.

“The construction industry needs to ensure it avoids long term skills shortages when the industry returns to growth. Our evidence suggests that the industry has tried hard to retain skilled workers and engage in training to improve current skills.

“It is imperative that a level of recruitment is maintained in these difficult times if the industry is to respond in the right way when growth returns.”

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