Interest Rates Cuts to Revive Building Industry Jobs?
The recent economic downturn has led to nervous times in the construction industry. Construction recruitment has been slashed as building projects are put on hold, whilst potential buyers slam the door shut on their finances and ride out the economic storm in the only way they know how – by not spending money.
Help, though, is at hand. The recent 1.5% interest rate cut by the Bank of England was designed to give the UK economy a shot in the arm and to get the wheels of industry turning again. Priority number one was the construction industry, which has a massive workforce and huge financial commitments to maintain. The interest rate cut, described as a ‘brave move’ by construction industry commentators, is seen as a direct result of intense lobbying by the construction industry and house builders, as well as the satellite businesses that depend on the buoyancy of the construction industry to continue trading.
The cut was in response to a marked deterioration in the economic outlook, with inflation no longer seen as a threat, but underlying trends still showing a continuing slide into recession. This is exactly what the construction industry doesn’t need right now, so pressure to cut interest rates was seen as the only way out of a downward spiral. Construction recruitment is a major contributor to the UK economy, which depends so heavily upon a well-functioning housing market. Without that housing market in place, jobs in construction drops as workers are no longer required for projects that have either been suspended or, in some significant cases, mothballed altogether. The interest rate cut could turn that situation around and get the construction industry back to work far more quickly than had been predicted just a few months ago.
The Home Builders Federation (HBF) called for an interest rate cut as early as May this year, but specified that this cut must be passed on to homebuyers if any positive effects were to be felt in the construction industry. Stewart Baseley, Executive Chairman of HBF said: “Action from the bank is needed if we are to break the vicious downward spiral of sharply lower mortgage lending, falling house transactions, falling prices, declining home buyer confidence and a worsening outlook.”
The construction industry (and consequently construction recruitment) needs and wants to get back to work. The demand for housing is still strong, but in a bleak start to the winter quarter, potential homebuyers are still reluctant to take the chance of buying when the market is in decline. The interest rate cut will make house buying more attractive as the country battens down the hatches against an economic storm that just won’t vanish overnight.
Construction recruitment will continue, prompted by the interest rate cut, as homebuilders and construction companies decide that it’s ‘business as usual’ and start opening up sites again. This may be small comfort for those whose jobs in construction have been already hit by the downturn, but bodes well for future employment within the industry as confidence in the marketplace returns. Once the interest rate cut filters down to the buyers, the hope is that construction companies will start to see the demand for housing return, and the rush to re-employ or renew contracts will begin again, kick-starting the industry.
On a global scale, the fiscal policies that Gordon Brown has presented to the G20 summit may prove to be a system that can be incorporated universally, not just benefiting the UK construction industry, but worldwide construction as a whole. For once, countries are going to have to talk to each other to build a new post-2008 recession world.
Duncan freer - Director - Construction recruitment Jobs Search is a job site dedicated to the specific needs of candidates who work in the building services and construction industry in the UK. We also provide recruiters with an online service that is effective in terms of cost and ease of use. Contacts For interviews, images or comments contact: John Roberts Marketing Manager Email: john@thejobsearchgroup.com