Building employers warn of more cuts

A FURTHER 50,000 construction workers will lose their jobs this year despite sightings of the first green shoots of recovery in the industry, employers forecast yesterday.

According to the Building Employers Confederation's latest quarterly trade survey, inquiries for new work have begun to improve for the first time in three years. Firms are more optimistic about employment levels and there are encouraging signs that the housing market is picking up.

But the confederation still expects output to fall another 2 per cent and the number of construction jobs lost since the onset of recession in 1989 to reach 520,000 by the end of the year.

Meanwhile, an analysis commissioned by the Government suggested that despite a pick-up in the economy unemployment will continue to rise and peak at 3.1 million. The University of Warwick Institute for Employment Research has predicted that the number of jobless will remain above 2.5 million in the 1990s.

City and academic pundits are more pessimistic, and on average forecast that unemployment will have reached 3.24 million by the end of this year, with some fearing a total as high as 3.45 million.

Sir Brian Hill, president of the BEC, welcomed the rise in inquiries for new construction work but said: 'We must wait and see whether this improvement is the beginning of a sustained recovery. Overall, I believe that the construction industry still needs further stimulation and I hope that the Chancellor will be able to make a further cut in interest rates at the earliest oportunity.'

Job prospects among British exporters appear to have been boosted by the pound's exit from the exchange rate mechanism, according to another survey published yesterday. The DHL quarterly export indicator shows that 31 per cent of of manufacturing exporters will increase their workforces over the next six months against only 7 per cent anticipating further job cuts.

While the Government never publicly predicts unemployment figures, the data from the Warwick Institute constitutes the main independent source of research on which ministers base employment policy decisions.

The Institute's annual Review of the Economy and Employment - using figures supplied to Whitehall - predicts that manufacturing will lose another 600,000 jobs over the next decade, taking employment in that sector to below 4.5 million by the year 2000.

The service sector is expected to grow substantially, particularly in hotels, catering and other miscellaneous services and in health and education.

While the present economic downturn has been characterised as the 'white collar recession', the underlying trend for such workers remains favourable. A substantial increase in the number of managerial, professional and associate professional jobs is expected. The outlook for those with craft skills, plant and machine operatives and unskilled labourers was much less optimistic, the study said.

Self-employment is expected to increase so that between 1991 and 2000 there will be an additional 200,000 people working for themselves.

Review of the Economy and Employment, published by the Institute for Employment Research, University of Warwick, Coventry, CV4 7AL.

View from City Road, page 22