In a tough assessment of the UK’s economic problems, the IMF praised Osborne for sticking to his debt reduction plans, but echoed calls for fresh measures to stimulate the economy.
The global economic watchdog said Chancellor George Osborne should spend less on public sector wages and more on infrastructure if he wants to boost growth and jobs.
The industry has seized on the report and called for more investment in housing and infrastructure to drive growth.
Labour also insisted the IMF report showed Britain needed to come up with a ‘plan B’ to kickstart growth and stop the economy sliding further into recession.
Christine Lagarde, the IMF's managing director, warned: "Growth is too slow and unemployment, including youth unemployment, is too high. Policies to bolster demand before low growth becomes entrenched are needed."
The IMF recommended an immediate cut in interest rates from the 0.5% level and an additional burst of quantitative easing to stimulate the economy.
Mike Leonard, Director of the Modern Masonry Alliance said: “So, the IMF have spelled it out.
“What Britain needs now is a plan B, which the get Britain building campaign has already published.
“Talk of a further interest rate cut and quantitative easing are entirely the wrong solutions. History tells us that the construction industry will lead us out of this recession.”
Leonard added: “We call upon the Chancellor to announce funding for a programme to build 25,000 additional social homes now, cut VAT on home improvements to 5% and bring forward major infrastructure projects.
“This will create jobs for the 22% of young people now unemployed and for the 280,000 construction workers who have lost their jobs during this long and deep down turn.
“It will also protect our building materials manufacturing capacity which ensures 92 pence in every pound invested in construction stays in the UK.
“The construction industry stands ready and waiting to kick start the economic growth our country so badly needs, so now Mr Osborne it is time to get Britain building.”
