‘Construction needs government help, north and south’

Much more needs to be done by governments on both sides of the Border to turn round the fortunes of the ailing construction sector, industry leaders said yesterday, following news of a further sharp fall in output.

Official data showed that firms built less in May than a year earlier even with an extra working day, denting hopes that the UK economy emerged from recession in the second quarter. Construction output dropped 6.3 per cent in the month on a non-seasonably adjusted basis, the Office for National Statistics said.

Between March and May, output slumped 7.4 per cent compared with the same three months in 2011. New public housing work plunged by 22.9 per cent, while volumes of new public non-housing excluding infrastructure and new infrastructure fell by almost as much.

Michael Levack, chief executive of the Scottish Building Federation, said the UK-wide figures painted a “truly depressing picture” with “eye-watering” declines in new housing and infrastructure work.

He said: “Given the concentration of new construction in London and the south-east [of England] due to the Olympics, Crossrail and other projects, we can expect that the situation in Scotland may be even worse than these statistics indicate.

“While the Scottish Government’s recent announcement of an additional £100 million for ‘shovel ready’ infrastructure projects is very welcome, much more will need to be done – especially at UK level – to provide the stimulus the Scottish construction sector needs if we are to play our part in a sustainable economic recovery.”

Steve McGuckin, managing director of construction consultancy Turner & Townsend, added: “What began as a dip has become a dive.”