The construction industry is facing its sharpest decline on record. With no prospect of an improvement in the near term, output and employment are set to fall even further in 2009 and 2010.

This is the stark picture according to the new Construction Trade Survey compiled by the by the Construction Products Association, which covers building contractors, civil engineering contractors, specialist contractors and construction products manufacturers.

The Survey, which covers the first quarter of 2009, provides no respite from the current recession, suggesting that the situation is likely to deteriorate across the whole industry. The decline endured in 2008 is set to be exacerbated in 2009 with decreasing demand in the economy leading to unprecedented falls in output and employment within the construction industry.

Speaking about the survey, Noble Francis, Economics Director at the Construction Products Association said: "The worst fears of those in the construction industry look set to be realised. With deep recession in the economy weighing heavily upon construction, the latest quarter of output within the industry, covering 2008 Q4, already highlighted the steepest decline since 1980. However, the latest Construction Trade Survey suggests that the situation has deteriorated further."

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Julia Evans, Chief Executive of the National Federation of Builders said: "These are clearly challenging times for our industry and SMEs are battling to overcome incredible odds. We know from talking to NFB members that many are frustrated both by the difficulties they face in accessing pubic sector contracts and by banks refusing the necessary capital needed to operate.

"With private sector work opportunities hit hardest of all, government must encourage public sector clients to release work in a wider range of procurement methods. We need some smaller bundles or individual contracts let outside of over-large framework packages to ensure SME contractors are able to compete. There is also an urgent need for pressure to be put on banks to make sure they pass on the funding where it is needed."

The Association anticipates that the construction sector as a whole will fall 12.1% during 2009, the sharpest decline on record and the private sector is expected to endure the worst falls, falling 20% in 2009 alone. While 2008 saw private housing and industrial sectors suffering, 2009 is expected to see sharp falls in offices and retail new build, with private housing repair and maintenance also set to be hit hard.

(GK/JM)