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UK construction sector facing '10 more years of pain'

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UK construction sector facing '10 more years of pain'

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Published by Max Salsbury for 24dash.com in Housing and also in Development, Finance

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The UK construction sector is facing 10 more years of pain, according to CITB-ConstructionSkills, the Industrial Training Board and Sector Skills Council (SSC) for the industry.

CITB's Construction Skills Network report cites 2012's 9% fall in output and 60,000 job losses as the culmination of five bad years for the sector, which the report says has been one the most difficult periods since World War II.

Last year saw a:

• 20% downturn in public sector housing and non-housing construction;
• 5% downturn in private housing construction;
• 10% downturn in commercial sector construction and;
• 15% downturn in infrastructure construction.

And the prospects for the next five years, warns the report, are equally bleak, with nearly every area of the industry forecast to struggle.

Only the private housing, repair and maintenance and industrial sectors are predicted to achieve anything like consistent growth.

The industry as a whole is expected to grow by only 0.8% over the next decade and will not match its 2007 output peak until 2022.

The report also predicts that employment in the sector will fall every year until hitting a low of 2.36m in 2016.

Recruitment to the industry is predicted to run at an average of 29,050 a year from now until 2017 – largely to fill vacancies arising from those leaving the sector. Only Greater London and the East of England can expect to see employment actively grow in this period.

Whilst Wales, Greater London and the North East are predicted to show the greatest increase in output during 2013-17, the North East is recovering from sharp declines in previous years, and much of the growth in Wales is linked to the Wylfa nuclear power build.

In contrast, the construction industry in the North West, the Midlands and Yorkshire and Humberside is expected to shrink still further.

Judy Lowe, deputy chairman of CITB-ConstructionSkills, said: "Construction found itself at the heart of a ‘perfect storm’ in 2012 – hit hard by a combination of public sector spending cuts and a lack of investment in the private sector. Client and consumer confidence is low and it is keeping growth levels down.

"Worryingly, the outlook doesn’t look much better – by 2017, construction output will still be 12% down on its 2007 peak, and employment 17% down on its peak in 2008. Indeed, we don’t anticipate the industry returning to its former levels until at least 2022 – meaning this will be one of the most difficult periods for construction on record.

"Construction is a vital engine of UK growth. While construction struggles for its survival, it’s impossible to see how the UK economy can generate significant growth.

"What’s bad for construction is bad for the economy, so doing nothing is not an option. There is too much at stake. Construction remains the only industry that can kick start the economy in the short, medium and long term. We know that, for every £1 invested in construction, £2.84 is generated for the wider economy. There are currently over 150,000 unemployed construction workers. This potentially costs the economy £2.1bn a year in unemployment benefit and lost tax revenue. The actions we are proposing are straightforward, easy to implement and will deliver the results that re-establish construction as an essential element of economic growth."

Now over 1,400 construction bodies and employers have joined forces in the CITB-ConstructionSkills inspired Construction4Growth campaign.

Tomorrow, a deputation from the campaign will meet ministers at an 11 Downing Street Summit, where a 10-point plan for working with government to secure growth and support the industry will be discussed.

The plan examines:

• ways to get projects delivered as part of the Government’s pledged capital investment in construction;
• investment in shovel-ready repair and maintenance projects to get unemployed construction workers back on site and;
• a mandatory requirement for teachers to undertake taster courses to understand the value of a vocational career.

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