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How can construction emerge from recession too?

The news this week that the construction industry has not been able to climb out of recession like other industries, has been met quite calmly by those in the industry.

During times of recession, the construction industry has traditionally been the first to enter recession and the last to emerge, so this week's figures have not come as a galloping surprise to many.

The Office for National Statistics showed that the overall British economy experienced 1 per cent growth in the third quarter of this year, lifting it slowly but significantly out of recession, with the huge success of the London Olympics commanding much of the credit.

The figures were not too sunny for construction, however, which saw output decrease by 2.5 per cent in the third quarter of 2012 compared to the second quarter.

Alasdair Reisner, from the Civil Engineering Contractors Association (CECA), said that the statistics highlight the importance of focusing on the construction industry now to ensure that it does not serve to hinder or drag down the rest of the recovery. The industry is not actually predicted to return to growth until 2014, but Reisner said that underlying issues – such as competition for contracts and financing – need to be scrutinised.

“The plummeting output for the sector should give the government grave cause for concern,” he said. “Any continuation of these declines runs the risk of dragging the UK into a triple-dip recession. We need swift action to unlock the potential of the construction industry so that it can play its role in the sustained recovery of the UK economy.”

The National Federation of Builders (NFB) has called for more government support – from the Homes and Communities Agency – to help lower volume housebuilders to obtain funding for projects. The organisation said that funding needs to be injected into the construction economy at a very low level, to help all of the smaller companies and skilled traders to play a part in rebuilding British construction.