The appalling GDP figures released today suggest construction has got off relatively lightly so far – odd don’t you think?

The economy took its biggest nosedive since mid 1980 in the final quarter of last year, a drop of 1.5%.

But surprisingly construction was less impacted than most sectors and the economy in general.

I say surprisingly, because I genuinely am surprised by the data.

Yes manufacturing has tanked, down 7% in the final quarter of last year compared with the final quarter of 2007. The extended festive “holiday” at the UK’s car plants no doubt played a big part.

Yes catering and hospitality has taken a beating, the broad sector of distribution, hotels and catering, repairs saw activity in the final quarter of last year down 4.3% on the same period in 2007.

Construction, however, seems to have come off lightly, if the figures are to be believed. Activity in the sector was down just 0.8% in the Q4 2008 compared with Q4 2007.

That said the figures in the GDP preliminary release show a fall of 1.1% in the final quarter. That’s a pretty sharp fall.

But if the pattern of recent quarters continues then the initial estimate will be revised to a figure that suggests less pain.

Overall the figures suggest that 2008 saw 1.6% more construction work done than in 2007.

Instinctively that doesn’t sit easily with me. Why?

Well let’s cast our minds’ back. Remember construction’s bleak winter of 2005? No of course you don’t.

But between Q2 2005 and Q4 2005 construction output, measured by the GDP figures, dropped 1.5%. That didn’t stop the chatter and fears about a skills crisis. Firms were not going bust almost daily.

I wouldn’t be as foolish as to suggest that the circumstances we are in now compare with those in 2005. This is very different. Then there was a slight squeak of the breaks as the economy responded to monetary tightening in 2004. Money was more expensive, but at least you could get your hands on it.

And the pain was soon relived as the (in my view) rather ill-advised drop in the Bank of England base rate in August 2005, shortly after the 7/7 London bombings.

The interest rate cut revived optimism and construction duly resumed its upward path in 2006. Confidence in the industry was further bouyed by the prospects of a building banquet in advance of the 2012 Olympics.

All that said, I remain fascinated by what might be maintaining the aggregate level of construction output at the moment, given that so many firms are failing and so many people are being laid off. Given that the massive house building industry has ground to a near standstill.

The one explanation I will be given is that proportionately more value is added at the end of construction jobs than in the earlier stages.
If you except that explanation expect the figures to fall off a cliff pretty fast from here.