'Worst recession for 60 years' in building trade

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The Independent Online
THE construction industry is in the grip of its worst recession since the 1930s, with no relief expected until 1994, according to the Building Employers' Confederation.

It says there is no sign of a hoped-for recovery in the housing market because of fear of unemployment and lack of public confidence in economic recovery.

The confederation predicts that job losses in the construction sector will exceed 300,000 by the year-end with a further 50,000 likely to be cut in the building materials industry. The jobs toll so far in the present recession is 260,000.

Sir Brian Hill, president of the confederation, warned yesterday: 'I do believe, with all the indices I have in front of me, that 1994 seems most likely before we see a sustained upturn. This is without doubt the worst recession in the past 60 years.'

Figures in the confederation's latest quarterly survey show that construction output in the three months to June was 7 per cent lower than in the same period of 1991, the eighth successive quarterly drop.

Only the eastern region and, to a limited extent, Scotland, bucked the trend.

Although the rate of decline is slowing, the confederation expects a fall in output of up to 6 per cent for 1992 as a whole.

Ian Deslandes, director-general of the confederation, said that 66 per cent of firms expected less work over the next 12 months, while only 12 per cent expected more. This 'very disturbing' trend was particularly severe for national contractors, 87 per cent of whom expected less work in the year to come.

The balance of firms reporting new inquiries, a key to future prospects, also declined during the second quarter compared with the first three months of the year. Almost half of the 600 firms interviewed expected to cut jobs over the next three months.

The confederation warned: 'This strongly suggests that there will be no resumption of growth before 1993 at the earliest.'

Sir Brian said that any increase in interest rates or cuts in public expenditure would inflict still more pain and make it hard for the construction sector to lead the economy out of recession as it has done in the past. 'Our industry is in a state where it cannot take much more,' he said.

He called for the Government to continue the suspension of stamp duty, which ends next month, on all properties up to pounds 80,000.

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