Chief executive Michael Ankers said: “We recognise the need to reduce public borrowing and welcome the urgency with which the government intends to do this.
“However, the government must ensure that future public spending is focused on delivering economic growth through the provision of essential energy and transport infrastructure, education facilities and housing.
“Where money is spent it needs to deliver the most cost effective solutions, as appropriate capital investment not only stimulates economic recovery in the short-term, but provides a beneficial legacy in the longer-term, by increasing productivity.
“As a result, the government should ensure that net public sector investment does not fall below 2.25% of GDP, as if it does the asset base of this country will begin to deteriorate and we will be simply storing up problems for the future.
“It is also essential that business competitiveness is not harmed. With decisions on investment made at a global level, it is critical that the UK is seen as a competitive place to conduct business, to ensure economic recovery is not delayed and to make long-term growth certain.
“This is clearly a critical time for the UK economy and the government is faced with very difficult decisions as to how it can sustain the economic recovery in the short term, whilst demonstrating it is intent on redressing the public sector deficit as quickly as possible.
“The construction industry has an important role to play in this. In the short- term we can help speed up the economic recovery whilst at the same time playing an important role in providing the basis for long-term economic prosperity and helping to ensure that government targets are met.”