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When will the construction sector recover?

The latest construction purchasing managers index (PMI) has confirmed what many people had feared with the construction sector contracting for the 22nd month in a row. Even though there are signs that the UK economy as a whole may well be stabilising and potentially turning the corner there is concern that the construction sector will lag the recovery and could struggle for some time to come. So why will the sector lag the UK recovery?

In simple terms, as the recession hit home there were a number of construction projects underway and a number which had just been finished. While these will range from office buildings to homes and everything else in between, there will need to be an increase in demand to take up the slack which was left behind when the construction sector collapsed - before any new projects can be delivered to the private sector. How long this will take depends upon the speed and strength of the eventual UK economic recovery, something which nobody is certain of.

When you also consider that the construction sector was one of the largest employment arenas in the UK economy there will at some point be a significant reduction in unemployment numbers but again this may be some way down the line yet.

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