Introduction and background© Centre for Economics 4and Business Research Ltd, 2011. Cebr suspect, therefore, that LEK's estimateprovides a better reflection of the economicsituation today. To the extent that this is the case,the national- and regional-level estimates of thetotal GVA and employment impacts presented inthis report can be considered under-estimates.. Cebr used so-called 'location quotients', inconjunction with the UK vector of technicalcoefficients to produce individual constructionmultipliers for each of the English regions, Wales,Scotland and Northern Ireland. The UK construction industry since the recession. The construction industry has shrunk significantlysince the 2008 financial crisis and subsequentrecession. UK-wide construction output declined inreal terms by 2.8% in 2008 and by 13.3% in 2009.. While our analysis suggest a circa 8% real termsexpansion in UK construction output in 2010, this ismodest in absolute terms (due to the lower base).Furthermore, our forecasted rate provides notnearly enough growth to get the industry back topre-recession levels.. Total workforce jobs in the construction industrydeclined by 6.8% during the year ending December2009, by a further 2.4% in the year to December2010 and, again, by 1.7% during the first half of2011 (based on seasonally adjusted data). (Part-time jobs are included in this measure of employment.). Meanwhile, the Coalition Government's top priority is cutting the deficit and the impact of thespending cuts are beginning to be felt throughoutthe UK economy, not least a construction sector that derives 40% of its output from public sector contracts.. This is exacerbating significant difficulties alreadybeing experienced by the construction industryfollowing the sharp declines in private sectorconstruction activity in the wake of the financialcrisis and economic recession. . The industry has had varying fortunes in thedifferent UK nations and English regions. Forinstance, regions like the North East haveexperienced dramatic falls in output, while others like London and the South East have fared much better.

Introduction and background© Centre for Economics and Business Research Ltd, 20115. With the devolution of public spending to localcommunities and the emergence of Local Enterprise Partnerships (LEPs), UKCG wants to be able to demonstrate to these local leveldecision-makers the important economic contribution made by construction to their nationaland regional economies. . Making the case for continued public investment inconstruction is especially important for thosecountries and regions that have seen the biggestdeclines in private sector construction activity as aresult of the recession.. The purpose of this report is to demonstrate thiscontribution to each of the Welsh, Scottish, NorthernIrish and English regional economies. In doing so,we hope to support UKCG with objective andindependent evidence to support the case forcontinued investment in construction, not only at theUK level, but also at the local level.