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The sharp drop 3.3% in construction output during the final quarter of 2010 confirms the findings of Glenigan’s own research, which has seen a sharp fall in the value of new projects starting on site.

According to Allan Wilen, economics director, Glenigan “Reduced government funding is increasingly restricting the flow of health, education and other public sector projects, whilst a sluggish housing market has hampered the recovery in private sector activity. December’s severe weather conditions compounded the downturn leaving the value of underlying projects starts during the three months to December 29% down on a year earlier.”

Wilen continued “Near term, project starts and construction output will enjoy a temporary boost as contractors press on with work delayed by December’s big freeze. Looking ahead further ahead, we anticipate that a gradual strengthening in private sector commercial and private housing activity will help to offset the impact of further retrenchment in government funded work.”