From the TUC

Construction news still hopeful for GDP – but what will take the place of the public sector?

12 Nov 2010, by in Economics

Today’s figures for output in the construction industry show that it continued to make a positive contribution to GDP in the third quarter of 2010, though not as strong as in the second quarter. The public sector still accounts for an unusually high proportion of construction work, making it doubtful that the industry can maintain its previous performance once the cuts start to bite.

Growth of Construction Output Since 2008

Construction output grew by 4 per cent in the last quarter, not as high as the 6.8 per cent recorded in the previous quarter, but still very respectable. If we look at those categories where the figures distinguish between the public and private sectors, we can see that the private sector dwarfs the public (as usual) but that the share of total output accounted for by the public sector is still much higher than it was before the recession:

Share of Different Elements of Construction Output Accounted for by the Public Sector

Construction has been making a strong contribution to this country’s comparatively healthy GDP over the past 12 months. But an important part of this story has been the relatively large proportion accounted for by the public sector – can the private sector make up the difference when the cuts start to bite?

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    Nov 12th 2010, 8:54 pm

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