Construction orders are at their lowest level since 1980

By Chris Williamson MP

As a former bricklayer myself, the news that orders for new construction work fell dramatically in the second quarter of the year is of a particular concern.

Construction is hugely important to any economic recovery and it is therefore particularly worrying that orders for new construction work are now at a level not seen since 1980. Orders fell by over 16% compared with an already low figure in quarter one and are over 23% down on the same quarter in 2010.

I share the concerns of the Construction Products Association Chief Executive Michael Ankers. He says these figures are alarming at a time when the economy is already slowing and the construction industry is supposed to be playing a major part in rebalancing the economy.

The fall in public sector orders of 30% is no surprise given the cut back in public sector spending, but this is compounded by a fall in new orders for private sector construction too. This is down 8% on the first quarter of the year and 10% down on the same quarter last year.

Furthermore, assertions by the Housing Minister, Grant Shapps, that this government would build more houses than Labour are proving to be illusory. The reality is, according to the Construction Products Association, new orders for private housing have fallen again and are down by 8% on the first three months of the year. Meanwhile, orders for commercial work are now back to where they were in the middle of 2009.

Of course talk is cheap. The one thing government ministers have been good at is talking. But the outcomes of their policies are proving to be 180 degrees different to their rhetoric. Little wonder then that their growth forecasts are constantly being downgraded when the measures they are taking are so plainly wrong.

The reckless ministerial team in charge at the Department for Communities and Local Government is making matters far worse for the construction industry and is creating an additional drag on economic recovery. Examples of their irresponsible approach include abolishing housing targets, slashing the social housing budget and scrapping regional development agencies.

My worry is that the government’s ham-fisted approach to economy recovery will only make matters worse. Construction is a good economic barometer and these figures are further evidence of even more economic stormy weather ahead.