Construction to suffer from spending cuts

Britain’s building firms face a double-dip recession next year as a private sector recovery fails to fill the gap left by public spending cuts, an industry trade body has warned.

Output will fall by 0.8% across next year, according to the Construction Products Association’s latest five-year forecasts.

Chancellor George Osborne‘s spending cuts mean a sustained recovery is unlikely to emerge before 2012 and the industry could take until the end of the decade to return to 2007’s peak.

The office market is expected to fall 16% this year and then return to a 6% rise in 2011. “The commercial sector in particular is not yet driving the recovery,” the association’s chief executive Michael Ankers said.

Publicly funded education projects – which have already been hit by cuts to the Building Schools for the Future programme – are set to slide to almost half this year’s peak by 2014. A temporary boost from London‘s Olympic venues will also fade as work on the main venues is completed next year, the body adds.

Construction made a strong contribution to the UK‘s 1.2% growth between April and June but the latest warning comes after official figures also showed a 14% fall in construction orders during the second quarter.

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