Job cuts rise due to fall in construction

With the UK economy set to shrink by up to 1 percent through 2009, the construction industry seems to have taken one of the greatest hits as construction activity has fallen to a record low.

Demand for both new build houses and commercial property are at a record low, due to the economic crisis as the Construction Purchasing Managers’ Index revealed by fallen for the last eight months.

As is the way when an industry crumbles, profits fall and jobs go and job losses at construction companies are now at a record pace as the employment index for construction has fallen to 40.9.

This reduction in activity has meant fewer purchases so hardware and building suppliers have been hit as well as sub-contractors, who are being squeezed in both directions due to labour excesses and increased competition for contract work.

It is not all negative, though, as new build turnaround times are now quicker than ever, as are delivery orders, due to the fact that there are simply fewer orders to transactions than a year ago.

October has continued to prove to be a difficult month for the construction industry, and with the reserve in the sector continuing, the outlook does not look good.

The situation that UK contractors find themselves in is also felt on the continent, especially in Spain, where the economic growth of the last ten years or so has been built on the construction industry.

For UK speculators, the fall in property prices in regard to new builds must surely be seen as an opportunity to invest wisely in these difficult times.

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