CPA: Dramatic fall in construction output puts tens of thousands more jobs at risk
In response to today’s publication of the official statistics, which show the sharpest fall in construction output in nearly 30 years, Adrian Barden, Chairman of the Construction Products Association has written to Lord Mandelson warning him of major job losses and urging him to ensure government delivers the construction programmes it has already committed to.
Stressing the plight of construction product manufacturers and suppliers, Barden said; ‘It is essential the government keeps to its programme for investment in construction projects, such as schools, hospitals, social housing and infrastructure so as to sustain employment and economic activity to deliver the projects that provide a lasting and beneficial legacy. Output in some parts of the construction products industry has fallen by nearly 50% in the last 12 months and more than 60,000 jobs had been lost by the end of 2008. A further 9,000 job cuts have subsequently been announced and some 12,000 people in the industry are on short time working. The scale of job losses is staggering. This is ten times the number of jobs estimated to have been lost in car manufacturing.’
‘In addition, it is proving increasingly difficult for companies to raise capital and to renew finance facilities with the banks. Capital investment by our member companies has all but ceased and credit insurance is rapidly disappearing. All of which is having a particularly detrimental impact on SMEs.’
Turning to concerns about PFI he added; ‘In 2009, the industry is expecting to benefit from nearly £4 billion of PFI projects, primarily for education, health, and transport. The latest survey by Barbour ABI has shown in excess of £17 billion of future planned PFI work yet to start which could well be severely delayed because of the inability to secure private finance. Whilst we welcome the government’s announcement this week that loans will be available from the public sector to ensure that some of these are not delayed, this money will come from existing departmental programmes and is therefore likely to be at the cost of other projects.’
‘Unless these schemes and other projects brought forward in the Chancellor’s Pre Budget Report statement actually go ahead this year we seem likely to see the number of redundancies in the construction products industry exceed 100,000 since the start of the recession.’
Key findings from the ONS statistic on construction output are:
. The industry lost £1.4bn of construction work in the final quarter of 2008 compared to the previous quarter; a 7% fall, which is the largest fall in output since 1980
. Private housing output fell by 13% compared to the third quarter of 2008; the largest fall since the first quarter of 1991 during the last recession
. Output in the commercial sector fell 11% during the final quarter of 2008 compared to the previous quarter; the largest fall since 2001
ENDS
NOTE TO EDITORS:
The Construction Products Association represents the UK’s manufacturers and suppliers of construction products, components and fittings. The Association acts as the voice of the construction products sector, representing the industry-wide view of its members. The sector has an annual turnover of £40 billion and accounts for 40% of total construction output.
FOR FURTHER INFORMATION CONTACT:
Michael Ankers Chief Executive
Construction Products Association
Tel : 020 7323 3770
Fax : 020 7323 0307
Mobile : 07887 897 581
E-mail : michael.ankers@constructionproducts.org.uk
Simon Storer Communications and External Affairs Director
Construction Products Association
Tel : 020 7323 3770
Fax : 020 7323 0307
Mobile: 07702 862 257
E-mail: simon.storer@constructionproducts.org.uk
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