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FMB predicts 90,000 construction job losses

Friday, 16 January 2009 9:00 AM

Construction redundancies could reach 90,000 in the first half of 2009, according to the Federation of Master Builders (FMB).

Over half of FMB registered construction companies have made people redundant in the last three months, and some 52 per cent of all FMB companies plan to make further redundancies in the first six months of 2009.

The FMB latest State of Trade Survey, the only one which reports on small to medium sized businesses in the construction sector, also found that 60 per cent of FMB companies had reported a fall in workloads.

Richard Diment, director general of the FMB said: "These figures are truly devastating. We know that when the recession last hit our industry 500,000 people were made redundant, we cannot allow that to happen again. The construction sector is weakening at a shocking rate, which is why the government must act now to prevent any further suffering.

"The government must do all it can to increase consumer confidence to encourage spending in the home improvement market. A targeted cut in VAT to five percent on home maintenance and repairs would help kick start this move."

Expectations for the future remain downbeat with 61 per cent of FMB companies expecting lower workloads in quarter one of 2009. Private house builders have remained the worst hit, with 71 per cent reporting a fall in workloads.

Mr Diment added: "The government's recent £20 million loan guarantee to the SME sector is only part of the solution as it needs to go further and develop a range of measures to help the building industry.

"For instance, a strategy to tackle the refurbishment of the existing housing stock offers a potential market of between £3.5 and £6.5 billion every year. Reducing VAT from 17.5 per cent to five per cent on property repair and maintenance work would be most effective than the current 2.4 per cent cut, and further moves to reform Stamp Duty to make it a graduated tax would all help safeguard the thousands of jobs now at risk."

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