Construction, the cornerstone of the economy, is in a downward spiral as public spending cuts translate into lower demand and lending conditions remain tough, said the National Federation of Builders (NFB).

Figures released from the Office of National Statistics (ONS) show that the total volume of new construction orders in the second quarter of 2010 fell by 14 per cent compared with the first quarter of 2010 and fell by 9 per cent compared to the same period in 2009.

-- Advertisement --

Julia Evans, Chief Executive of the NFB said: "The importance of investment is clearly demonstrated by the fact that the only part of the sector to show a rise in orders was private industrial. But it is clear that private orders are not going to be enough to offset the losses facing the industry in the public sector arena.

"The government needs to do two things: it needs to look at value, rather than just the sticker price, when finalising the comprehensive spending review. It also needs to take radical action to create the conditions that will help private investment to increase. For example it should reduce regulatory burdens and costs that would enable private investment to replace public funding of new homes."

(CD/GK)