TO SAVE Pounds 400m OUR BUILDERS; SALMOND CALLS FOR CASH ADVANCE AFTER BIG SLUMP IN CONSTRUCTION Industry Shrinks by 7 per Cent Causes Double-Dip Recession

Daily Record (Glasgow, Scotland), July 19, 2012 | Go to article overview

TO SAVE Pounds 400m OUR BUILDERS; SALMOND CALLS FOR CASH ADVANCE AFTER BIG SLUMP IN CONSTRUCTION Industry Shrinks by 7 per Cent Causes Double-Dip Recession


Byline: Magnus Gardham

ALEX Salmond has stepped up calls for a pounds 400million cash advance from the UK Government - to deal with a dramatic collapse in Scotland's construction industry.

Figures released yesterday showed the building trade shrank by 6.9 per cent in the first three months of the year, plunging the whole of the economy back into recession.

Reacting to the news, the First Minister urged the Con-Dems to approve a pounds 5billion building bonanza and pledged to use Scotland's pounds 400million share to get more than 34 "shovel ready" infrastructure projects off the ground.

The slump in construction, which followed a terrible 2011 for the industry, meant fears of a "doubledip" recession have been realised. The building trade has been hammered as contracts have dried up across Scotland.

Many firms have been relying on bank loans to keep going - but with credit tight, an average of one big company per month has been going bust since the start of last year.

Official figures yesterday suggested 12,000 building workers have been laid off in the past year.

construction union UCATT ed it "could easily be e that".

But insisted double And executive Building represent warned would government Backing for funding, is a dam terms we are Michael Levack, chief tive of the Scottish ng Federation, who sent over 600 firms, ed the situation get worse without nment support. king Salmond's calls nding, he said: "There am ready to burst in of insolvency and re already starting to see the cracks appear. Companies are under pressure to compete on suicidal margins and many are holding on by the skin of their teeth.

"We're looking at a death by 1000 cuts. Without work and without the support of the banks, it's impossible."

Yesterday's Scottish Government figures showed construction has now been in decline since the middle of 2010.

The industry has shrunk to 80 per cent of its size CALLJ Salmond in 2007 and is in as bad a shape as it was during the big recession of 2008/9. Harry Frew, Scottish secretary of UCATT, said: "We've had a hard time since 2007.

"If you get into recession you need to build yourself out of it.

"If there was more investment in construction, you would see an increase in the GDP figures."

Scotland's economy shrank by 0.1 per cent in the first three months of the year, yesterday's GDP figures showed.

After a similar dip in the final three months of last year, it means Scotland is officially in a recession.

The UK economy shrank by 0.4 per cent in the final three months of last year and by 0.3 per cent from January to March.

Construction has been the hardesthit sector of the economy by far.

Salmond warned that without a building boom Scotland's sluggish economy was "bumping along the bottom".

The First Minister said: "If the difficulty and the problem is the construction sector, which is dragging down the rest of the economy, then the way to apply the medicine is directly onto the construction sector by direct capital investment.

"For the last quarter, we have seen growth in agriculture, production, services, financial services and manufacturing.

"In other words, the economy - with the exception of construction - is recovering. But construction is a key motor of the economy."

Labour's finance spokesman Ken Macintosh said: "There is no doubt that the UK Government's austerity politics are failing but we need a much more sophisticated response from the Scottish Government.

"Changing procurement policy - the way Government uses its purchasing power - is now essential."

Separate figures yesterday offered brighter news on jobs, with the number of unemployed Scots falling by 4000 to 215,000 from March to May.

But retail sales figures showed no improvement last month compared with the same period last year. …

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