Construction faces 'long and slow' return to growth

Growth in the construction industry will return only slowly over the next few years after a "severe" contraction which will hit hundreds of thousands of jobs, a report claims today.

The Construction Skills Network expects output to have fallen 13 per cent last year and forecast that 375,000 jobs have been lost since 2008, with just 100,000 being recouped by 2014.

It predicted a marginal decline in output this year, with no consistent recovery until 2011, when there will be a "slow and steady" return to moderate levels of growth.

Construction output in the next few years is forecast to be strongest in Wales, Scotland, the east of England and East Midlands.

Mark Farrar, chief executive of ConstructionSkills, which represents the industry, said: "The recession has hit construction extremely hard and the forecast recovery is likely to be long and slow.

"This situation remains fragile and we are concerned that, given the scale of the public sector deficit, potential funding cuts in the period ahead will further exacerbate the loss of skills before private sector investment has fully recovered."

Sandra Lilley, manager of the Construction Skills Network, said: "The forecast clearly shows what many in the industry already know; that construction has been through a severe recession.

"Falls in employment tend to lag falls in output, so it is crucial for the industry to focus its efforts on retaining workers currently in employment.

"These workers will be needed to keep businesses competitive as growth returns in 2011. The industry needs to act now to avoid the long term skills shortages which were faced after the Nineties recession."