The term recession can be defined as a period of general decline in business activity. During a term of nationwide recession, a reduction in production, selling and purchasing will be observed, along with a boost in general unemployment. Sometimes a recession will have a direct effect on a particular industry or geographical area. Based on previous terms of recession, an economic downturn brings the end of extended periods of inflation and can mean a reduction in product prices. The people most affected by recession are the employees that lose their jobs when businesses need to cut their expenditure.

The recent recession has affected all areas of the UKs national economy. In December 2008, the construction sector diminished at its highest rate since records began. The biggest decline was recorded in house building, with the civil engineering and commercial sub-sectors also falling at record levels during that particular month. This meant that the Bank of England had to cut interest rates to reduce borrowing costs to the lowest level in its 314-year history.

As is expected in a recession, not only has the housing construction sector experienced a decline, but the housing market has been badly affected also. Some individual research institutes have suggested that during 2008, house prices fell by a considerable margin, possibly even as much as 16.5%. The upside of this situation has meant that, with lower interest rates, purchasing property has become a good deal more affordable. However, as a consequence of the recession, obtaining a mortgage has become more difficult, with the number of approved mortgages in the UK decreasing by the largest rate for 9 years.

Simply put, the last few years of economic recession has had a huge affect on the construction industry, more than many other industries. To simplify the business jargon, the construction industry has seen a reduction in the demand for new constructions. House prices have fallen because of the same reason; that being diminished demand, leading to property owners having to cut their asking prices to entice buyers.

For the reasons stated above, it is imperative that in the current financial environment, businesses in every industry continue to be competitive; though it is also important for businesses to be prepared, in every sense, for the forthcoming upturn that is inevitable in order to take full advantage of the situation.

To put everything into perspective, the fact that the sustainability of the construction industry is at risk in times of recession is no secret; and there will always be continuing employment, or more specifically, unemployment problems, as is the nature of the construction industry. The only way to help overcome these problems will be to expand. Having more assets and financial resources means that a business has more economic sustainability when fiscal downturns ensue.

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