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ACE has published its Quarterly Economic Snapshot for the third quarter of 2011, highlighting the risk of a triple-dip recession in construction.
The third quarter estimate for gross domestic product is presently at 0.5% according to the Office of National Statistics. However, construction output is at risk of a triple dip recession having declined by 0.2% in the third quarter. This follows contraction between Q2 2008 and Q3 2009, as well as contraction in Q4 2010 and Q1 2011.
Nelson Ogunshakin OBE, ACE chief executive, said: “This data underlines how fragile the construction recovery is. ACE welcomes the measures announced recently in Westminster and Holyrood to accelerate investment in infrastructure, as this will give a boost to the industry and the economy as a whole. However, we cannot afford to let the momentum slow.
“Tackling the investment challenge requires new funding methods, new approaches to risk management, and a fresh approach to public-private partnership. ACE has been exploring a range of these issues, and will continue to work with government and industry partners to help government to boost confidence and continue efforts to creating certainty and foster an environment conducive to investment.”
Throughout the third quarter of 2011 interest rates were held at their existing level of 0.5% by the Bank of England's Monetary Policy Committee. This was despite inflation remaining well above the Bank’s target rate of 2.0%.
The government has announced up to £21 billion of credit easing targeted at smaller firms to support the economy, and has set out plans for a National Loan Guarantee Scheme to reduce lending costs to small business. With nearly a third of companies reporting that borrowing costs had risen, there are signs that credit remains restricted and these measures will seek to ease that concern.
To read the Quarterly Economic Bulletin in full please click here.
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For media queries please contact Gavin Pearson (gpearson@acenet.co.uk) (020 7202 0255)
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