Builders' latest survey dashes recovery hopes

HOPES that the construction industry is at last clawing its way out of recession faded yesterday after building employers warned that there was no prospect of recovery for at least a year.

In its gloomiest report for several months the Building Employers Confederation said output was still in decline, confidence had taken a further knock, and unemployment had passed the half-million mark and was likely to continue climbing.

Sir Brian Hill, the BEC's chairman, said it was now essential that the Government take action to stimulate the industry by cutting interest rates immediately and bringing large projects such as the Jubilee Line extension on stream as soon as possible.

According to the BEC's latest state of trade inquiry, the optimism felt earlier in the year has given way to a renewed decline in confidence brought on by political and economic uncertainty, speculation about tax increases and continuing fears of unemployment. Building output was still falling after four successive years of decline, and inquiries for new work have dipped after picking up in the previous two quarters.

A quarter of firms surveyed expect to shed more jobs between now and September. In addition, 95 per cent of firms are still working at less than three-quarters of capacity and, against all expectations, there are no signs of improvement in the repair and maintenance sector.

'From these results I can see no prospect of any sustained recovery within the next 12 months,' Sir Brian said.

Confidence is also faltering among Britain's exporters, according to another survey released yesterday. The latest DHL quarterly export indicator shows a decline in both short and longer-term confidence, with increased raw material costs affecting exports and two-thirds of manufacturers saying that recession in their main European markets will hamper recovery in the UK.