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1 July 2009

Construction industry in major crisis

The effects of the economic crisis mean the construction industry is facing its toughest period for over a generation.

Suzanne Beishon, Architecture student

Wages are falling, the criminal blacklisting of construction workers has been exposed and job cuts are predicted to reach 450,000 in England, with 23% of London's construction workforce likely to be shed by 2012.

This crisis of the construction industry leaves much of the working class and in particular young people with a bleak future.

At the start of my architecture degree course we were told that 'this was the best time to be an architecture student' and that 'there were jobs everywhere'.

Two years later we were being told that only 5% will get jobs when we graduate. The number of architects claiming jobseekers' benefits has increased by 560%, the highest percentage increase in the construction industry.

Many on my course, and others, are no longer worrying about university fee debts because they have resigned themselves to the fact that they are heading for one of KFC's 9,000 new jobs or similar and so will never earn enough to have to pay them back!

This is a worldwide crisis. Even strong construction markets like that of the United Arab Emirates are being affected. Economic growth there is expected to slow from 20% to 15% in 2009 and the UN predicts that across the globe economic output will shrink by as much as 0.4% this year.

In the UK it is becoming clear that construction is heading towards decline. Forecasts suggest a 7% fall in output over the next three years. This figure relies on government spending going ahead as planned and this is unlikely.

Even if all public sector funding is spent this year, the construction industry in 2009 would still see the largest percentage fall in output since the early 1990s when over 500,000 left the industry. The situation today though is ultimately a result of the recent collapse in the private sector.

In the third quarter of 2008 new public housing orders went down by 36% and private housing orders fell by 62%. Housing that does get built is often substandard - a CABE (Commission for Architecture and the Built Environment) audit in 2007 found that 88% of new housing in Eastern England wasn't good enough and 26% should never have been built.

This very rapid decline in private projects has been partly propped up (so far) by more public sector spending on infrastructure. However this is unlikely to continue in the long run given the government's plans to cut public spending massively.

Money is supposedly being put into public building programmes in order to help stave off the recession but the reality is many of these are PFI programmes. The output of the 'government and other services' sector, on which many in the construction industry have been pinning their hopes, fell by 0.5% in the last quarter of 2008.

Behind schedule

Already the Building Schools for the Future (BSF) programme is behind schedule with only 50 schools being remodelled or refurbished by March this year instead of the 200 targeted to be finished by the end of 2008.

Ministers want to use BSF to prevent a fall in output in the construction industry but this is looking increasingly difficult as the plans to have every school in the country remodelled or refurbished by 2020 are stumbling.

Private companies are struggling to raise funds to complete projects or to take part at all. The government is refusing to take over these programmes, instead looking to help out the private companies to the tune of 2 billion.

This crisis hits workers on all fronts from jobs to homes. We face the crazy situation where there is a desperate need for a mass house-building programme, with 4.5 million people waiting for social housing and there were 40,000 repossessions in 2008.

There are an estimated 943,000 properties unoccupied. Yet 450,000 construction workers are set to lose their jobs over the next three years.

This really illustrates the illogical nature of capitalism and its complete inability to provide for the working class.

The construction industry faces a desperate period in this economic turmoil and will be one of the key battlefields for working class struggle, as has already begun to be seen in strikes across the country over construction engineers' jobs and conditions.

Every country is seeing its construction industry suffer - most acutely in Spain where there are 3-4 million vacant homes (one of the highest levels in the EU).

This is going to be an industry of increased struggle, with the Gama dispute in Ireland and the Lindsey Oil Refinery dispute here showing the vital and decisive role that socialists will play.

The huge anger that exists amongst these workers can lead to important fightbacks and victories for the working class.




http://www.socialistparty.org.uk/articles/7507