The CIPS appeared to be putting a rather positive spin on its July figures for construction activity on the back of a slowdown in the pace of decline and swelling optimism among its respondents.

The press release reads: “Optimism about future activity levels in twelve months’ time continued to increase in July, reaching its highest level since April 2007. Many construction companies in the UK believe that economic conditions will improve and lead to higher sales.”

And the CIPS spokesman suggests: “Optimism is returning to the UK construction sector on the back of a perceived improvement in economic conditions. Whilst the current situation still looks very bleak, an upturn looks much closer than it did just a few months ago.”

I hate to spoil the party, but there must either be significant impact on the figures resulting from survivor bias or large swathes of the industry are unaware of the hole the construction industry finds itself plunging into.

The industry currently is being supported by the public sector spending. The collapse of that support within the next couple of years is all but a given.

I would be intrigued to know where the investment will come from to replace the gaping hole that will leave. And I am sure that the experts who put together the industry forecasts would be equally eager to know. Like me they really want their forecasts to be proved wrong and over pessimistic.

I feel sure the CIPS talk of optimism will baffle the boffins.

The more so because there also appeared to be some comfort drawn from the main CIPS construction index rising from 44.5 to 47.0 against the neutral mark of 50, when the industry is going neither up nor down.

But as Jack and Jill would tell you, when you tumbled down a hill the pace of decline varies. Sometimes, even, you appear to bounce upward.

But lest you think I always seek gloom when the sun shines. I was taken by the comments on the house building sector figures. The CIPS found activity had fallen back dramatically after showing recent signs of improvement.

This was taken as a concern. It isn’t, it is to be expected, if as many suggest the sector is experiencing the effects of destocking. Certainly a solid rise followed by an easing is consistent with the fluctuations caused by destocking and then readjusting to the new lower level of activity.

If the industry projections are correct house building activity is reaching the floor and will soon level and perhaps will start to see a gentle uplift, albeit from historically low levels.

Personally I see the house building sector as one of the more stable and promising from the point of view of growth.

But for me the most important observation to be made within the commentary is: “Sub-contractor usage fell during the month, and at a slightly faster rate than in June. Availability of sub-contractors improved again, while their charges continued to fall at a marked pace.”
What would be interesting to know is how much this marked pace of decline is leading prices into the sub-economic.

Still it’s summer and a time to be jolly and forget your woes – maybe that has something to do with the outbreak of optimism.