The UK Construction Blog

Britain today cemented its position as the only G20 country still in recession as new figures confirmed that the economy shrank by 0.2 per cent between July and September.

Analysts had forecast that today’s figure — the final estimate of national output for the third quarter — would show that the economy stopped contracting or even grew.

But while gross domestic product (GDP) contracted at a slower pace than the previous -0.3 per cent reading, the figures confirmed a sixth successive quarter of recession – the country’s longest downturn in history.

Today’s figures will serve as a further embarrassment for the Government, which is facing a general election next year.

Although the Chancellor, Alistair Darling, has said he expects the country to emerge from recession at the “turn” of the year, Britain’s failure to recover in the third quarter has left it trailing behind other major economies that have seen a return to growth.

America, China, Japan, France and Germany all returned to positive growth in the third quarter while most recently Ireland, which has been suffering from a severe downturn, also revealed it had left recession.

Expectations that Britain had exited recession had been raised by a major revision, earlier this month, by national statisticians, in their assessment of the construction sector.

However, the sharp upgrade to construction output was offset by weaker services and industrial production output.

Howard Archer, chief UK and European economist at IHS Global Insight, the consultancy said: “While any upward revision to GDP is welcome news, there is no denying the fact that it is a disappointment that the contraction in UK GDP in the third quarter was only trimmed to 0.2 per cent quarter-on-quarter, particularly given the substantial upward revisions that had already been announced on construction output.”

He added, though, that the latest data and survey “pointed to growth finally getting underway in the fourth quarter.”

The markets were shocked in October when the Office for National Statistics said its initial estimate for GDP showed that the economy shrank by 0.4 per cent in the third quarter.

Analysts had thought the country had clambered out of recession with an increase of between 0.1 per cent and 0.2 per cent.

Last month the ONS revised the estimate to show a more modest 0.3 per cent decline.

Earlier this month, the ONS then boosted hopes of a further upward revision, with an announcement that its assessment of the construction sector had been wide of the mark.

It said that construction output rose by 2 per cent in the third quarter — contradicting its earlier estimate of a 1.1 per cent drop. The figure, it said, would increase the overall GDP figures by 0.2 percentage points.

Philip Shaw, an economist at Investec, said: “We still find it hard to believe fully that the economy was contracting in the third quarter.”

Since Britain entered recession, in the second quarter of 2008, total economic output has fallen by 6.03 per cent. The decline is the sharpest since quarterly records began in 1955. Most experts expect the economy to return to growth in the final three months of this year.

However, many suggest any recovery will remain anaemic into next year.

The Treasury has forecast economic growth of 3.5 per cent in 2011 — a forecast branded as overly optimistic by many analysts.

The CBI has forecast the economy will grow by 1.2 per cent next year and by 2.5 per cent in 2011.

If the Treasury forecast proves false, the Government will have to find more money to cover its spending as tax receipts will not have risen fast enough.

However, the Bank of England recently predicted economic growth of more than 4 per cent in 2011.

In a referendum organised by the nationalist Swiss People’s Party (SVP), 57.5 per cent of voters approved a constitutional ban on the construction of minarets.

The SVP labelled minarets as symbols of a rising political power that could transform Switzerland into an Islamic state. Voters in just four of the country’s 26 cantons, or states, rejected the initiative.

Mangera Yvars Architects’ Ali Mangera, who masterminded the original London super-mosque proposals, said: ‘Decisions like this should be placed on architectural factors, not a pretext against Islam. This is more to do with the emasculation of a group of people – the right wing is behind this.

He added: ‘[Minarets] are not ideal for every part of London and they are not just about the call to prayer. But they are interesting features and also function as natural air conditioning mechanisms. ’

Adrian Stewart, director of Do Architecture, which designed the minaret-less Al-Furqan Mosque in Glasgow for the UK Islamic Mission, said: ‘This is being used to isolate a community. A minaret is not a critical component of a mosque and does not always have to be involved. The debate has been blown out of proportion. We know from experience there is a desire to generate a regionalism, which makes a mosque very much more about its location.’

Muhammad Abdul Bari, secretary general of the Muslim Council of Britain, commented that mosques and minarets in Europe remained ‘manifestations of the proudly indigenous nature of Islam in Europe’.

He added: ‘It is tragic that the far right is stripping away at our heritage of coexistence between faiths and cultures in Europe.’

Far right parties in Austria, Belgium and France have used the Swiss vote to call for a similar ban in their own countries.

Eight men have been charged with offences under the Identity Cards Act 2006 after being found working illegally at the Media City site.

The men were arrested during a UK Border Agency operation to Connolly Construction Facilities, Media City, 111 Broadway, Salford M50 2EQ at 0930 on Monday 14 September.

As a result the men were charged under the Identity Cards Act for using false documents to gain employment. They were remanded in custody to appear at Manchester Magistrates Court yesterday (15 September 2009).

The arrested men, who were working as labourers on the site, were of various nationalities and ages and included one Gambian, four Ethiopians and three Eritreans.

The operation went ahead with the co-operation of the construction company, who will face no further action over the arrests.

Commenting on the arrests, UK Border Agency Regional Director for the North West, Eddy Montgomery, said:

‘Foreign nationals must obey the laws of this country in the same way as everybody else, and those who have committed criminal offences here are therefore subject to the same legal processes as anyone else in the UK.

‘Anyone breaking the law, irrespective of whether they are a British citizen or a foreign national, can expect prosecution and, where appropriate, a custodial sentence.’