Recent reports have it that the injection of public money that is supposed to pump new life into the construction industry is just not making it. Construction projects across the UK lay abandoned and uncompleted sector, glaring evidence that the sharpest contraction that the building sector has ever known looks a long way from ending.

According to a recent survey carried out on behalf of the industry, the UK government pledge to re-programme more than £3 billion of publicly owned construction projects , that were due to begin in 2010 and 2011 to this year, have failed to materialise as yet. The idea of bringing these projects forward was to offset that painful lack of new building starts in the private sector.

However a recent report from the Construction Products Association revealed that a nationwide cross section of their members reported that instead of the promised increase in new projects, even existing construction projects have been mothballed by the UK government as funding dries up. These projects include important and much needed public works including schools, hospitals road works and general infrastructure, had found public work had declined over the past year. Of the civil engineering and building companies contributing to the survey, 47 per cent of them reported lower work rates in the first quarter of 2009. Construction companies involved in building social housing reported a fall of project completions 27 percent compared to last year.

According to a spokesman for the UK Contractor’s Group, the government stimuli that was promised in Darling’s budget and pre-budget reports have so far failed to appear and their absence is having a very distinct impact on the UK construction industry, which has been hardest hit by the recession. The sector accounts for about 8 per cent of UK output and a similar percentage of jobs.

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Tags: Alastair Darling, Alistair Darling, British Economy, Budget, Construction Industry, Construction Products Association, Credit Crunch, Economy, Employment, Recession, UK Contractor’s Group, UK Credit Cards, UK government, UK Recession

While reports set at various levels of optimism indicate that the beginning of a recovery for the UK economy is due to “kick off” around the same time as the World Cup in South Africa, late June 2010, the future for the construction industry in the British Isles, looks considerably more bleak.

Analysts continue to go as far as to predict that the construction industry will not be back on its feet till the Summer Olympics of 2020. Around about that time, UK construction figures will be back around the levels that they were during the World Cup of 2006. That makes for almost fifteen years of stagnation for an industry that was responsible for almost ten percent of the UKs national income at its peak.

Predictions are that the construction sector will decline by 16 per cent in 2009 with a further 5 percent decline in 2010. In true terms, the decline will bottom out during 2011. From that year onwards up until 2020, growth will begin but beginning at immeasurably low levels, until finally arriving at a recovery figure of £82.5 billion in 2020. These figures are part of a report issued by the Construction Products Association (CPA).

According to the CPA, construction output will creep up from £69 billion to just £69.3 billion in 2011, a massive 16 per cent behind 2006’s levels.
A spokesman for the CPA announced that the severity of downturn in the construction sector was causing a knock-on effect seriously affecting the entire UK economy. The general consensus was that last week’s downward revision of gross domestic product, from 1.9 per cent to 2.4 per cent, was to a large extent due to the downturn in construction starts.

One glimmer of light coming out of the CPA’s report was the estimate that the public sector, which currently accounts for a third of new work in the industry, will be the one area of relative stability.

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Tags: Construction Industry, Construction Products Association, CPA, Financial News, Recession, Summer Olympics