Smaller contractors fear double dip recession

Grant Prior 14 years ago
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Small and medium sized contractors fear they are heading for a double dip recession after battling through three years of declining workloads.

The gloomy state of the SME construction sector was highlighted in the latest State of Trade Survey from the Federation of Master Builders which was released today.

The survey showed 42% of respondents to the federation’s Quarter Three 2010 State of Trade Survey said that public new build workloads had fallen and that a further 51% expect them to do so again in the next three months.

Richard Diment, Director General of the FMB said: “The severe reduction in workloads for small construction companies working on public sector new build projects such as schools, hospitals and other infrastructure construction is a direct consequence of the Government’s public sector cuts.

“We are now moving towards a double dip recession in construction with more than half of our members anticipating falling workloads in the public sector over the coming three months. Only 9% of our members expect things to improve.”

“In some respects these dire results for the public new build sector are unsurprising given that the Government announced in July that only those schools in the Building Schools for the Future Programme that had reached financial close would go ahead.

“This is clearly going to have a massive impact on the construction sector and we fear that there is worse to come when the results of the Comprehensive Spending Review are announced next week.

“The survey results clearly illustrate the timing gap in government policy. The Government is working on the assumption that the private sector will create new jobs to replace those lost due to public cuts but this doesn’t look likely to happen for construction.

“The industry has already lost around 159,000 jobs and our survey data shows that workloads for SMEs in all sectors of the construction industry are a long way from the kind of consistent growth that is going to create stable jobs to replace those already lost, let alone those that will be lost as a result of the Comprehensive Spending Review and the VAT increase.”

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