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Third of firms 'cutting construction jobs'

More than one-third (37 per cent) of UK construction businesses have claimed they plan to cut jobs in the coming months as a result of the ongoing malaise in the industry.

According to recent findings from the Federation of Master Builders (FMB) in its State of Trading Survey, lower employment levels were reported by a third of companies during the second quarter of 2012, with 30 per cent stating they are likely to make job cuts in the second half of the year also.

Brian Berry, chief executive of the FMB, said: "The problems affecting the construction sector pose real problems for the wider economy, not just because of the direct cost of unemployment but because of the impact on the industry's skills base.

"Evidence from past recessions shows that when people leave the construction industry they tend not to return when the economy recovers."

He added that this process in turn leads to a lengthening of project times and forces up prices within the industry.

As a result, Mr Berry has called on the government to make bolder policy decisions regarding the promotion of new developments to help stimulate the UK construction sector, as the present situation is one which cannot go on forever.

Indeed, he claimed that after four years of recession one would expect the industry to be getting back on its feet, but with ongoing heavy job losses afflicting many firms this is a situation which seems as far out of reach as ever at present.

Earlier this month, Mr Berry argued that greater confidence within the construction sector is required to help provide a stimulus towards recovery, with an improvement in lending one of the main areas where this could be achieved.

If banks and lenders provided easier access to funding, this would provide an incentive for builders to take on new work, while also benefitting the economy as a whole, Mr Berry concluded. 

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