Over half of the Federation of Master Builders (FMB) construction companies have made people redundant in the last three months of 2008, but even more alarming is the news that 52% of all FMB companies plan to make further redundancies in the first six months of 2009.

If this is repeated across the entire construction SME sector this could amount to at least 90,000 job losses in the first six months of 2009.

The FMB's latest State of Trade Survey, the only one that reports on small to medium sized businesses in the construction sector, also found that 60% of FMB companies had reported a fall in workloads, a fall for the fourth consecutive quarter. Expectations for the future remain downbeat with 61% expecting lower workloads in quarter one 2009. Private house builders have remained the worst hit, with 71% reporting a fall in workloads.

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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 5% on home maintenance and repairs would help kick start this move.

"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% to 5% on property repair and maintenance work would be more effective than the current 2.4% 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."

(CD/JM)