Construction industry slumped in final quarter

Construction output in the final quarter of 2010 slumped by 3.3 per cent, suggesting that the sector’s fledgling recovery has come to an end.

Over the second and third quarters, it had looked as though construction was improving, with output growing by nine per cent and 3.9 per cent respectively.

However, the extreme weather conditions seen at the end of last year, coupled with the threat of public sector cuts, means the sector has once again hit a slump.

Construction Products Association chief executive, Michael Ankers, said: “After two quarters of relatively strong growth in the middle of 2010, these latest figures show that the economic recovery has stalled even before the full impact of the public sector spending cuts is felt.

“Although the poor weather in the last few weeks of the year undoubtedly had an impact on the construction industry, as it did in 2009, it is clear that the recovery in the construction industry has already petered out and that private sector growth is not coming through strongly enough.”

It is anticipated that construction output will fall a further two per cent in the coming year.

With its future uncertain, the construction sector is likely to rely on temporary labour rather than boosting their permanent workforce, which could be good news for contractors.

Simon Noakes, chair of the REC’s Construction Group, recently said that temporary labour is “invaluable” in the construction industry.