Building Industry News

Construction industry warns against spending cuts

25/02/2010 16:36:24

The construction industry has urged the government not to risk the fledgling economic recovery by cutting public spending too early.

Following the global recession, Britain's construction firms have been hit hard, with orders dropping as credit was restricted and economic activity ground to a halt.

With the recovery now finally underway, the industry is concerned that big cuts in public spending will delay major infrastructure projects and push the economy back towards negative growth.

"The uncertainties surrounding the forthcoming general election together with the public sector deficit give rise to concerns over the future levels of public sector spending," John Dodds, Kier Group's chief executive, commented as his company announced a 20 per cent rise in pre-tax profits for the last six months of 2009.

Kier's fellow housebuilder Galliford Try struck a similar note, when it said: "The directors consider the principal risks which may have a material impact on performance in the second half are the macroeconomic conditions in the UK, government policies, and public sector spending."

Whichever party forms the next government, tough decisions will be required over public spending. As well as deciding where to make cuts, the government will also have to ensure that any belt tightening does not stymie the recovery.

Posted by Rachel King

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