Construction industry 'the canary in the mine' as pruductivity drops


Need to 'Build for Wales' as economic stagnation continues

Plaid Cymru Treasury spokesperson Jonathan Edwards MP has expressed concern for the construction industry after GDP figures showed a third quarter drop in construction industry productivity with the backdrop of a continued stagnation of the wider economy.

He said that this was ‘the canary in the mine’ and that urgent capital investment and support for small construction businesses was needed. This includes investing in infrastructure such as schools, hospitals and roads through Plaid Cymru’s ‘Build for Wales’ scheme and slashing VAT on housing renovations to 5%.

He repeated Plaid’s general call for government to concentrate on growing the economy, rather than making destructive cuts which hurt the economy and ordinary people.

Mr Edwards said:

“In Summer 2010, the construction industry was out-performing other sectors as the weather improved but in Summer 2011 it has headed back towards recession.

“The fall in productivity in the construction industry is deeply worrying as that is the ‘canary in the mine’ – the first sector to show signs of recession due to a loss of contracts and future confidence.

“With more than 100,000 directly employed in construction in Wales, we feel the hit on this very strongly.

“That is why it is crucial to invest in infrastructure in an economic downturn – spending money on schools, hospitals and roads. Unfortunately, that is just what has been hit by the UK Government in London and the Labour government in Cardiff with capital spending slashed by 40%.

“Plaid Cymru have consistently noted the importance of construction in maintaining employment and now is the time to introduce something like Plaid’s Build for Wales scheme which would raise money for us to start building.

“Another Plaid policy for growth is to cut VAT on housing renovations to 5%. Labour should have done this when in government. It helps small, family businesses and local people as well as allowing people to improve their homes.

“More generally, there should be a cut in VAT to help businesses and families get through these tough times and the UK Government should re-consider their destructive austerity cuts for the sake of growth and keeping people in jobs.”


Third quarter GDP figures for the UK showed a continued stagnation of the wider economy with just 0.5% growth. Greater growth had been predicted because of delays in the second quarter such as the Japanese tsunami and an additional bank holiday for the Royal Wedding.

The construction industry grew by 8.2% and 3.2% in Q2 and Q3 of Summer 2010 but by 1.1% and -0.6% in Summer 2011.