The end of January saw another negative report about the UK construction industry contracting for another month. Although the UK construction industry accounts for less than 7% of Gross Domestic Product, it is consistently blamed for keeping the UK in recession. This may or may not be the case as within every industry there are areas which gain and lose during tough economic times. However I wonder what the real reasons for lack of progress really boils down to. My own opinion hails back to the financial sector.
There were reports that demand was weak and a lack of new project accounted for much of the poor performance. However if we look further down the food chain, in my view it can only be as a result of the financial crisis. Many of the projects promised by government have been scrapped to cut the deficit and many private housing projects have been abandoned due to lack of finance from banks. All of this harps back to the original sin which the banking sector initiated and which clearly is still ongoing, with fines and punishments being handed out across the globe.
How can the construction sector bolster its output with such ongoing uncertainty and lack of project commitment and funding? Well it can’t but yet it bears the brunt of responsibility for keeping the UK in recession. This financial crisis and economic situation is going to last a very long time; I think we all have to face this fact. As such everyone within the building industry has to look beyond the old means and ways of gaining new business and look towards diversifying and perhaps look at brand new methods and means to keep afloat.
However for me the blame lies firmly with the financial crisis we find ourselves in, reckless trading and funding over many years has now brought us to a decade or two of tough times. This flows through every sector, not just the construction industry and this in my view is what will keep the UK dipping in and out of recession for the foreseeable future. Is it really fair that the construction industry has to bear the brunt of the blame for our ongoing recession!?