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Improved economic figures fail to allay construction fears

The UK economy shrank by 0.5 per cent in the second quarter of 2012 rather than the 0.7 per cent originally estimated, it was confirmed today.

The GDP figure from the Office for National Statistics follows an upward revision of construction output, which was announced two weeks.

That revision showed a 3.9 per cent decline in construction compared with Q1, rather than the 5.2 per cent originally announced, which is an early estimate based on only part of the period.

Noble Francis, economics director at the Construction Products Association, pointed out that the confirmation of a 0.5 per cent fall in UK GDP - along with the hike in public sector borrowing reported earlier this week - will still put pressure on Chancellor George Osborne to invest less at a time when people are calling for more money for infrastructure and housing.

Mr Francis said:  “Most of the macro economists are saying there should be investment in infrastructure and housing - but how can the Chancellor do that when he’s under pressure to cut spending further?”

The figures confirmed two weeks ago sparked claims of an industry facing ‘crisis’ and calls for urgent government action.

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