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Industry associations cry out for help

26 Apr 12 News that construction shrank 3% in the first quarter of 2012 has prompted industry associations to renew calls for the government to step up infrastructure spending.

Yesterday the Office for National Statistics confirmed that the UK had entered a double dip recession, dragged down in particular by a poor performance from the construction industry.

Scottish Building Federation chief executive Michael Levack said: “We fear this recession period may be with us for some time to come.”

He said: “Unless further urgent action is taken to boost capital investment, we will see further painful contractions in the sector’s output – and further job losses.”

National Federation of Builders chief executive Julia Evans said: “With borrowing still increasing and government departments bracing themselves for another round of spending cuts, we are not looking at a recipe for growth. Traditional drivers for growth, such as construction, are being tantalised with ineffective schemes such as Project Merlin, the National Loans Guarantee Scheme and NewBuy which will do little to help the viable smaller companies that the government itself is looking towards to provide growth.

“The NFB has been warning of a double dip for the past two years, and it is time now for the government to take serious action to help SMEs to help the economy.”

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Federation of Master Builders (FMB) chief executive Brian Berry said: “It’s a sad fact that the building industry has been in recession for four years with little hope of any immediate recovery. Until we get builders building again the economy is not going to recover. The construction industry holds the key to recovery which is why the government needs to invest in capital projects rather than just focusing its attention on budget cuts.

“Steps the government could take now to stimulate construction to help create jobs in the economy should include abandoning its plans to introduce VAT on heritage building; cut VAT on property repairs; take action on banks that discriminate against construction firms and their clients; open up public sector procurement to small firms; and introduce meaningful incentives to drive private domestic retrofitting.”

Construction union Ucatt called for a new direction from the government. General secretary Steve Murphy said: “The government has abandoned the construction industry. They have cut billions of pounds of planned investment and hoped that the private sector would meet this shortfall. That has not happened, resulting in a major fall in construction output.

“The government urgently needs a Plan B. The quickest way to restore growth is to undertake a major social housebuilding programme. Not only will this get construction workers back to work and restore confidence in the industry, it will help tackle the growing homelessness crisis.”

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