The UK economy shrank by two per cent in the first three months of 2020 due to the impact of coronavirus, official GDP data from the Office of National Statistics has shown.
The slump means the economy contracted at its fastest rate since the height of the financial crisis in 2008.
There was a further 2.6 per cent drop in construction, which was already suffering from a prolonged decline, as well as a record 1.9 per cent decline in the services sector and a 2.1 per cent decline in the production industry.
The Government must back local builders by bringing forward policies that support their recovery, according to the Federation of Master Builders (FMB) in response to ONS data.
Brian Berry, Chief Executive of the FMB, said: “Construction makes a significant contribution to our economy, so when output falls so does the the economy.
“The Government’s green light for for construction sites to re-open safely in England is very positive but it’s going to be a hard slog to get activity back to where it was.
“To reverse the decline in output a clear plan for recovery is needed that specifically supports local builders. Small to medium-sized (SME) construction firms operate across the country, and create local training and employment opportunities. They are central to achieving the Government’s levelling-up agenda, and can help stimulate local growth in the long-term.
“This should be delivered through a national retrofit programme that sets out a plan for upgrading our existing homes. This should be underpinned by a temporary cut in VAT to stimulate demand for these works.”
Make UK Chief Economist, Seamus Nevin said the data is unprecedented overall but does some anomalies. Although manufacturing shrank overall, there were some industries that grew including pharmaceuticals and cleaning products manufacturers - a demonstration of how important the manufacturing sector has been to the national effort to tackle the virus.
“The pandemic also hit trade globally, with UK imports and exports falling over the last couple of months, in a reminder that this is a worldwide epidemic that will require international cooperation to start the recovery,” he added.
“While the scale of the decline in the first quarter is a big worry, and we may not yet have reached the bottom, businesses are working with Government as never before to protect jobs and livelihoods and will continue to do so to ensure our economy can recover as quickly as possible”
