Just how bad has the construction downturn been in this country? An online report recently revealed that in London, the industry has so far avoided the worst effects of the economic slowdown. However, in the South East, most private sectors have experienced sharp falls in the value of construction starts during the first seven months of this year.

High-value construction schemes, such as the Olympic stadium, the Stratford City development and the Beckton desalination plant, have so far sheltered London from the considerable impact of the construction downturn. Social housing and infrastructure investment have also helped, accounting for an above-average portion of work starting on site during the first seven months of this year (£3,487 million in total). However, the capital is expecting a hard hit in 2009, as a result of sharp falls in commercial office projects securing planning approvals in 2008.

Meanwhile, in the South East, growth in the education and health sectors has so far eased some pressure of the construction downturn. However, construction prospects for the region are expected to further deteriorate in 2009, as planning approvals for the first seven months of 2008 are down 29 percent from the previous year. Although major infrastructure projects are still going strong, approvals for smaller projects (less than £100 million) have fallen sharply. After big spending this year, new construction starts for the education and health sectors are also expected to drop back in 2009.

Nonetheless, according to experts, the construction industry should be in recovery in 2010. The Construction Products Association has predicted that by 2011, industry output will be back at 2007 levels.