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Grim figures for construction outputOctober 2010

The UK construction industry is heading for a double dip recession, says the Construction Products Association (CPA).

The CPA's latest industry forecasts predict that construction will be the first major industry sector to fall back into recession following a temporary recovery in the first six months of this year. Despite strong growth in the spring and early summer, the forecasts show output will fall in the remaining months of 2010 and the decline will continue into the first part of 2011.

Commenting on the forecasts, Michael Ankers, Chief Executive of the CPA said: "In 2009 the construction industry suffered its sharpest fall in output since 1974. While there was a bounce back in the first six months of this year, the figures are deceptive.

"The factors that drove this growth - the short term impact of the last government's fiscal stimulus, a tentative recovery in the housing market, and the start of a number of major projects in the run up to the Election - are not the basis for a long-term recovery."

Although 2010 as a whole is likely to be slightly better than 2009, the CPA says that it will be "a year of two halves", with construction output slipping back in the second half of the year as a result of growing uncertainty in the housing market and cuts in public spending.

The CPA believes the construction industry needs strong private sector growth to offset the anticipated 18 per cent fall in public sector construction work over the next two years.

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