The announcement by the Office of National Statistics (ONS) that Gross Domestic Product (GDP) grew by just 0.2% in the second quarter of 2011 is symptomatic of the on-going slump in the British building industry, says the Federation of Master Builders (FMB).

Richard Diment, Director General of the FMB said: "Sadly, it's no surprise to us that the GDP figures are so disappointing as they mirror years of falling workloads in the building industry. The SME construction sector has been cutting employment for three and a half years and all the indicators point to the fact that we have still not hit the bottom. Looking ahead 36% of small building companies expect to see falling workloads over the next three months.

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"The ONS attributes the poor GDP figures to one off factors such as the effect of the Japanese earthquake and the Royal Wedding but the fact remains that the construction sector, which accounts for nearly 10% of the UK’s GDP, is in a very sorry state as a consequence of Government cuts in capital expenditure and falling consumer confidence. Housebuilders are only building half the number of homes that are needed to meet current demand and there is little sign that this situation is improving."

Mr Diment concluded: "The Government needs to refocus its agenda on creating conditions for business growth because without this the economy is going to continue to falter. Investment in our country’s infrastructure and building the homes that we need is now critical to creating the conditions for growth and securing our competitiveness in the world economy."

(CD/BMcC)