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Shock growth in construction output raises triple-dip fears

The construction industry grew a massive 6.6 per cent in the three months to the end of June, according to figures released by the Office for National Statistics last week.

The shock statistics officially bring to an end the double-dip construction recession after two consecutive quarters of 1.6 per cent negative growth.

Overall, the UK economy grew by 1.1 per cent in the second quarter of 2010, with construction contributing more than a third of this growth.

However, with public sector spending being slashed by the Government and few signs emerging that the private sector recovery has taken a firm hold, there are now fears of a triple-dip recession.

Construction Products Association economics director Noble Francis said: “Public sector work has fed through after the contracts rushed through in the final quarter of 2009 and first quarter of 2010 led to work early in the second quarter.

“However, despite this growth in Q2, workloads are still at a very low level and anecdotal evidence does imply that the growth in April and May slowed down considerably in June, especially with private housing starts falling 15 per cent.”

Analysis undertaken by Construction News suggests that the Government’s capital spending cuts could amount to in excess of £123 billion compared with what would be spent if current spending levels were maintained.