PRESSURE is mounting on the Chancellor to invest in major projects as figures show the UK is in the grip of the longest double-dip recession since 1955.
Construction groups in the North East last night warned there could be 5,000 fewer jobs in the industry in just 12 months unless George Osborne acts.
They expect there to be 600 fewer bricklayers, nearly 800 fewer plumbers and 900 fewer carpenters if the Government does not start to spend to create growth.
Latest figures show the economy shrank by a worse-than-expected 0.7% between April and June.
Dire construction and manufacturing output drove the biggest decline in GDP since the height of the financial crisis three years ago, alarming forecasters who had expected a 0.2% fall.
An extra day’s bank holiday for the Queen’s Diamond Jubilee and the wettest April to June period on record played a significant part in the fall, according to the Office for National Statistics.
But economists said the figures also laid bare an “underlying weakness”, with some branding the quarter a “disaster”.
Steve Housden, a manager at CITB-ConstructionSkills, said the figures suggest that “growth in the North East will be sluggish and lower than the UK average.”
He added: “But there is nothing to be gained by simply accepting the predictions. We need to meet the challenges for the good of the economy, our industry and the people who work in it.”
Businesses in the North East Chamber of Commerce also said the economic news was disappointing.
Director of policy Ross Smith said: “Any success at the moment is hard-earned by businesses and, with troubles in the eurozone continuing, the Government needs to take this figure as a stark warning stronger support is needed.”
Newcastle North MP Catherine McKinnell added her name to those calling for a change at the top. The shadow treasury minister said: “These figures show just how bad things have got under this Government.
“We are now in the deepest double-dip recession since the Second World War, and things are still getting worse.
“The problem is George Osborne’s omnishambles of a plan, but until he admits that he can’t take action to put it right. He urgently needs to change track if we’re going to get growth going again.”
Mr Osborne said he could not use the Jubilee as an excuse and said the “disappointing” figures highlight the UK’s “deep-rooted economic problems”.
He said: “We’re dealing with our debts at home and the debt crisis abroad.
“But given what’s happening in the world, we need a relentless focus on the economy and recent announcements on infrastructure and lending show that’s exactly what we’re doing.”