It’s official: the building industry is now in recession
THE construction industry is officially in recession after recording two consecutive quarters of negative growth.
Figures released last week by the Office for National Statistics (ONS) showed output was 0.4 per cent lower in the second quarter of the year after falling 0.3 per cent in the first three months.
The fact that the industry was in decline even before the referendum will raise fears that a broader economic downturn could cause serious pain for builders.
Brian Berry, chief executive of the Federation of Master Builders, said: ‘The construction industry has grown steadily over the past few years and for the sector to experience two consecutive quarters of negative growth demonstrates the powerful effect uncertainty and a lack of confidence can have.
‘The Government must now take bold action and do everything in its power to prevent these preliminary estimates by the ONS from becoming more sustained.
‘A firm commitment to invest public funds in capital projects such as house building and infrastructure would go a long way to assuaging fears that demand will dive in the wake of Brexit.’
However, economists said the figures for the second quarter may later be revised up slightly. Noble Francis, economics director at the Construction Products Association, said: ‘Looking at the balance of trade surveys, the impression is there was growth, but slowing growth.’
Figures from researcher IHS Markit on Tuesday will give a first indication of performance following the referendum.