After yesterday's quarterly analysis of the GDP, it was announced that the UK is officially back in recession. The Office for National Statistics (ONS) traces the 'double dip' to a sharp reduction in construction output.
Defined by two consecutive quarters of contraction, the UK's economy shrank by 0.3% in the last quarter of 2011 and 0.2% in the first three months of 2012.
Brian Berry, Chief Executive of the Federation of Master Builders (FMB) said:
“The Government will find it very difficult to get sustained growth in the economy while the construction industry remains depressed. Construction is essential to the well-being of the wider economy because of the variety and quantity of job its creates from apprentice bricklayers to world leading architects. Every £1.00 spent on construction generates £2.84 in the wider economy which makes it the best investment the Government can make to get Britain back on its feet.”
Berry concluded:
“It’s a sad fact that the building industry has been in recession for four years with little hope of any immediate recovery. Until we get builders building again the economy is not going to recover. The construction industry holds the key to recovery which is why the Government needs to invest in capital projects rather than just focusing its attention on budget cuts.”
Public sector cuts are being blamed for the industry's re-entrance into recession. Economics Director at Construction Products Association, Noble Francis says:
“Given that independent economic analysis has shown clearly that for every pound spent in construction, £2.84 is generated for the wider economy, it is essential that government does its utmost to switch its current spending towards the more productive capital spending.”
To aid the growth of the industry, Brain Berry has plans to introduce VAT cuts and wants to open up the procurement process for smaller firms.
