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.

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 - http://www.constructionjobsearch.co.uk