In response to ONS growth estimates published today which show that the economic situation is far worse than initially expected, the Chartered Institute of Housing (CIH) is urging governments across the UK not to ignore housing in their growth plans.
Preliminary estimates of gross domestic product (GDP), published by the Office for National Statistics (ONS), show that the economy contracted by around -0.7% during the second quarter of 2012. Many forecasters had expected the economy to shrink by around -0.2% - but reports show economic contraction was almost four times the initial estimates.
The worst performing individual sector was the construction industry, whose output decreased by 5.2% in the second quarter of 2012 following a decrease of 4.9% in the first quarter. ONS estimate that construction was responsible for -0.4% of the -0.7% reduction in GDP.
The figures confirm that the UK is now in the worst double-dip recession for at least 50 years, placing additional pressure on the government’s deficit reduction plans. Today’s figures highlight the need for government to move quickly in implementing additional measures. CIH is calling for government to recognise the role that increased housing investment could play in boosting economic growth – whether through the use of government guarantees or direct investment.
Gavin Smart, Director of Policy and Practice at CIH, said: “The UKs double-dip recession is exacerbating the housing crisis, yet investment in housing could drive economic recovery and provide the homes needed by hard-working families who are locked out of the housing market. Given today’s figures it’s even more surprising that government has yet to make housing a priority in its growth plans.
This needs to change and we urge government to recognise the role that housing investment could play in boosting economic growth.”