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UK recovery hindered by construction recession

The construction industry is lagging behind economic growth and will remain in recession, according to the latest construction forecasts from the Construction Products Association.

Although latest GDP figures indicate a continuation of recovery in the economy with 0.2% growth, the Association’s forecasts highlight a fall of 3% in construction activity during the first quarter of 2010.

Following last year’s 12% fall; the industry’s worst decline in more than 35 years, it is anticipated that by the end of the 2010 the construction industry will have lost £16bn of work in just three years.

At around 9% of GDP, construction is an essential part of the UK economy and if it remains in the doldrums, recovery for the economy as a whole is likely to be slow and protracted.

Construction Products Association chief executive, Michael Ankers, said: “This is not good news for the industry or the wider economy. The benefit of construction to the economy is well documented - for every £1 spent on construction, the economy benefits by £2.84.”

The Association also highlighted the importance of public spending to economic recovery, Ankers said: “The next government must understand the long-term significance of its actions; if capital spending falls below 2.25% of GDP our public services will begin to deteriorate and economic recovery will be delayed.”

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