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Construction back in recession with 0.7 per cent decline

The construction sector is officially back in recession after the sector experienced another two quarters of consecutive negative growth.

Office for National Statistics modelling suggests that the sector declined by 0.7 per cent in the first quarter of 2010, following the 0.9 per cent fall in the final quarter of 2009.

UK GDP as a whole rose 0.2 per cent in the first quarter of 2010, the same data revealed.

The weak data suggests that the brief growth period in mid-2009 was a false dawn as the construction sector has lagged behind ever since. Most predictions had suggested that 2010 would see further decline in construction, however, with many predicting falls of around 5 per cent this year to add to the double digit declines of 2009.

While the reasons for the further contraction in the sector were unclear, some surveys have suggested there is lower spending in the public sector as projects are delayed in the run up to the election on 6 May.

The rate of growth in the whole economy of 0.2 per cent, is a slowdown from 0.4 per cent growth in the final quarter of 2009.