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Fragile recovery needs government support

The UK’s leading infrastructure contractors have warned that signs of growth in the sector may be extinguished unless the government delivers on recent investment commitments. Results from the Civil Engineering Contractors Association (CECA) Workload Trends survey for the last quarter of 2011 published recently show growth in the sector for the frst tme in more than three years.

Five per cent more of those who responded to the survey reported increasing workloads when compared with those reporting declines, lifting figures for the sector out of the red for the frst tme since the onset of the global economic crisis in 2008.

The government has identified the infrastructure sector as being critical to returning the UK economy to growth. At his Autumn Statement Chancellor George Osborne committed additonal funding to key projects to support this growth. Yet analysis of the survey results shows that the improvement reported in Q4 2011 was driven largely by activity in the regulated sectors such as rail, water and sewerage. Actvity in the publicly-funded roads sector contnues to fall. Commentng on the results, CECA director of external affairs Alasdair Reisner (right) said: “Having experienced a long period of declining actvity any signs of growth are to be welcomed.

“However, we wou l d be ex t reme l y cautous about any suggeston that these fgures

suggest a sustained improvement in the sector. Most of the growth indicated comes from regulated sectors that are currently at or near the peak of their spending cycles.

“Our concern is that as spending in these areas falls away over the coming months, there may not be sufficient activity elsewhere to sustain workloads.

“For this reason it is essential that the government holds frm on its commitments to infrastructure made at the Autumn Statement. By doing so it will help secure vital contributons to growth, while supporting the future of the UK’s infrastructure supply chain.”

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Budget - an opportunity to Stimulate Growth

The Construction Products Association has written to the Chancellor in advance of his Budget statement next month, calling on him to introduce a range of practical policies that, whilst helping drive growth, will not endanger the government’s desire to achieve its medium term deficit target, but speed the country’s economic recovery.

Speaking about the Associaton’s proposals, Mi chae l Ankers , Chi ef Execut i ve of the Constructon Products Associaton said; ‘Public sector capital investment, will still fall 26 per cent between 2010/11 and 2013/14 despite the announcement made last year for additional capital spending in housing, education and infrastructure. To ensure the UK economy is given the best possible chance for recovery, it is essential that government focuses on sustainable investment for growth.

‘The 2012 Budget provides the Chancellor with the opportunity to introduce a package of measures to st imu l ate the economy and deliver growth. This should include a further rebalancing of public spending away from current expenditure and into capital investment, as this wi l l not only generate economic activity and employment but will increase long term productivity as a result of improving the infrastructure of this country. ‘ H o w e v e r , k e y t o d e l i v e r i n g t h e infrastructure that the country needs i s the attraction of additional private finance to compensate for the shortfal l in publ ic capital investment and the use of additional quantitative easing to raise levels of housing supply.’

Page 20 Contractors World - UK & Ireland Vol 2 No 2

Page 20 - cwuk-2-2

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