Business enviroment - ECONOMICS Essay Example | Topics and Well Written Essays - 1500 words

Business enviroment - ECONOMICS - Essay Example The UK construction industry has witnessed a fall of nearly two percent in construction activity during 2010 compared with last years 12 per cent drop and is expected to remain in recession. It is estimated that by the end of 2010, construction industry will have lost  £16 billion of work in just three years and the growth is not expected to return until 2011 and even then it is forecasted to be relatively subdued at just one per cent per year in the consecutive three years coming. An interesting factor to be observed here is regarding the private Vs public construction companies’ progress. Over the past one and half year, private sector construction fell by almost 20 percent, losing approximately  £14bn of work and a further fall of four per cent is anticipated during 2010. However, the public sector construction, on the other hand, rose due to government’s fiscal stimulus and contractors on government frameworks were able to take advantage of some of the falls experienced from the private sector. There are high chances that this trend is set to reverse in the near term as a result of economic recovery set to lead to a rise in construction funded by the private sector. On the other hand, the state of the public finances is likely to lead to a deep fall in public spending on construction. Critical fact lies in spending on public schools and housing, as well as on energy and transport infrastructure and they are not cut sharply, otherwise recovery for the construction industry might be delayed and consequently, the economic recovery in the UK might be severely hindered. 1. With some new contracts signed, in addition to existing work brought forward through governments fiscal stimulus, orders rose 60 per cent during 2009 and although the number of roads projects signed in the last first quarter of 2010 has remained broadly flat compared to