Construction set to shrink record amount in 2009

Construction is set to shrink by a record amount of 16% in 2009, according to the Construction Products Association (CPA).

The contraction is even worse than the 12% that the CPA had originally forecast in April, according to the BBC.

The CPA blamed a long lead time for contracts meaning that the commercial property slowdown was only just starting to have an effect.

The group is also warning that the growing public debt could now threaten public sector construction too.

CPA economics director Noble Francis said that new build offices are expected to drop 38% compared with last year and by 2010 new build offices are expected to fall by more than 50% compared with 2008.

Francis said that last year office and retail projects dating back to 2006 were still in the pipeline.

Meanwhile, the number of new build homes was set to fall to its lowest level since 1924, excluding World War II.

The CPA has also predicted another 5% contraction in the sector in 2010.