PricewaterhouseCoopers report says the comprehensive spending revue could lead to loss of 500,000 private sector jobs

Some 100,000 construction jobs could be lost as a result of public spending cuts, according to a report released today by accountant PwC.

A week ahead of the chancellor’s comprehensive spending review, the study estimates that half a million people in the private sector will lose their jobs as a result of the cuts.

The report also found that private sector output could be slashed by £46bn by 2014/15, or 2% of the total, which would not be enough to push the economy back into recession, PWC said.

John Hawksworth, PwC’s chief economist, said the private sector’s dependence on government contracts had increased during the downturn as other orders dried up, but now a “cold turkey period” was needed.

Dave Prentis, general secretary of Unison, said: “This report bears out all we have been warning over the past few months. Public spending cuts will damage the economy and will drag the country into a downward spiral.”