The Construction Products Association said construction output was forecast to fall by 6% over the next two years due to cuts to the national capital budget, and was being exacerbated by a lack of recovery in the private sector.
GDP figures showed the UK’s recession deepened further in the second quarter of 2012, led by sharp falls in construction. While the overall economy fell 0.7%, construction fell 5.2%, indicating a deep depression despite a number of recent government initiatives, the CPA said.
CPA economics director Noble Francis said: "Although the vast majority of commentators have been predicting continuing recession, very few will have expected such a sharp fall. For construction the position is now very worrying."
Insolvency experts PwC said there had been more than 5,500 insolvencies among construction businesses in the last two years, about 30% of which were general construction and civil engineering firms, with the remainder made up of trades such as plastering, roofing and painting, and architectural firms.
The NHBC reported the annual number of housing starts had fallen below100,000 for the first time in more than two years and plots under construction were at the lowest level for 12 years at 126,500. Homes started for the year to June 30, was down 8.3% at 98,500.
"As the year progresses we must hope to see a rebound in social housing numbers as providers adapt to new methods of funding," said NHBC commercial director Richard Tamayo.
