Tender levels dive 40% as double-dip looms

Aaron Morby 12 years ago

Tender levels plummeted 40% in the second quarter compared with the first three months of 2010, according to contracts service the Builders’ Conference.

The latest figures fuel fears that construction is careering into a double dip recession.

More worrying still, tender values are down around 30% on the same period last year when the construction industry fell into recession.

The Builders’ Conference chief executive Neil Edwards says these latest figures are not a post-election blip but indicative of a double-dip recession.

“During the second quarter of 2009, we compiled details of around 2,400 individual tenders that together had a value of just under £7.4 billion.

In the first quarter of 2010, that figure had risen to £8.25 billion on 2,066 tenders,” he says.

“In the second quarter of 2010, the number of tenders was very similar – 2,060 – but the value has fallen by around 40 percent to just £4.98 billion.

The falls are most pronounced in the housing and health sectors that are down 36 and 88% respectively.

Alarmingly road and rail tender levels have collapsed from £676m and £1.02bn respectively in the second quarter of 2009 to just £56m and £88m  in the same period this year.

Edwards warned that current Government policy is making a double-dip recession more likely and storing up problems for the future.

“Part of the new coalition Government’s austerity measures has been an immediate freezing of budgets for affordable housing but this is having a double knock-on effect,” he said.

“Not only does that mean that we’re falling further behind in our housing stock shortfall, it is also impacting upon private house-builders whose planning permissions are dependent upon a degree of affordable housing.

“If housing associations are unable to commit, housing projects will stop.  The Government needs to take immediate action to relax planning regulations to ensure that the housing market does not grind to a halt,” he warned.

Edwards believes that similarly bold action will be required to safeguard spending on schools, colleges and universities, a sector that has so far survived the cutbacks but which is likely to be in the Chancellors’ sights when he announces his emergency budget today.

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