For more years than I care to remember, the construction industry has been seen as the barometer of the UK economy; and it is true that the sector has an unerring ability to mirror public economic sentiment.
Just recently, however, a number of economic pundits have suggested that, rather than merely reflecting opinion, the construction sector actually has the ability to inform it, even turning around the UK economy’s downward spiral and returning it to profit.
Unfortunately, as 2010 draws to a welcome close, based upon the statistics emanating from The Builders’ Conference, any prospect of construction leading UK PLC back to the promised land of profitability remains but a distant dream.
With just over a month of the year remaining, the annual figures for many regions of the UK make for depressing reading. The North of England is down by around £2.5 billion on the same period last year, the Midlands is down by a further billion, while London – still presumably working towards the 2012 Olympics – is also down by £2.0 billion, making it responsible for some 30 percent of the fall from a country-wide £35 billion in 2009 to the anticipated £29 billion for 2010. East Anglia and the South West also recorded significant drops. In fact, geographically, only Scotland has anything to smile about having enjoyed a £1.5 billion upturn in its fortunes during the past year.
The downturn is equally evident in the market sector figures. Spend on both housing and schools is down by a billion pounds year on year, while spend on infrastructure, railways and roads have all taken a significant hit. It will surprise few to learn that the sectors worst hit are those that benefitted from a major investment as the previous Government attempted to buy itself an extended stay at 10 Downing Street.
All in all, the figures here at The Builders’ Conference suggest that we’re back to 2008 levels of activity. They also suggest that if economists are looking for a sector to lead the economy out of recession, they may be looking in the wrong place.
