Growing evidence of double dip collapse for construction

Growing evidence of double dip collapse for construction

The latest round of trade survey data points to an ugly acceleration in the rate of collapse of workloads.

Persistent sightings of green shoots over the late spring and summer now look to have been little more than a mirage.

The construction trade survey compiled by the Construction Products Association says the construction recession is deepening.

Experian’s latest monthly construction industry trends survey found that the rate of contraction in construction activity, having eased for much of this year, has accelerated for two months.

The buyers’ body CIPS construction industry survey found a similar trend, with the rate of contraction accelerating over the past two months.

The specialist contractors body NSCC found that both orders and inquiries have continued to shrink.

And perhaps the worst bit of news is the continued fall in tender prices recorded by the construction information service BCIS. It found tender prices fell by 4% in the second quarter of this year and were 11.7% below where they were a year ago.

The one surprising optimistic signal was from the specialists. The NSCC respondents on balance expect to see more workload in the coming quarter.

This however presents a conundrum as far as interpretation is concerned, because they appear to be saying with fewer orders and fewer inquiries they expect to conduct more work.

One possible explanation for this apparent paradox could be a rather savage outcome of survivor bias. With so many specialist contractors falling by the wayside there is more work for the remaining firms.

But whatever the reason for this hint of optimism or any other that can be found in the surveys, the overwhelming message is that either someone has taken a scythe to the green shoots or they were never really taking root.

And the cruel evidence from this latest batch of surveys now points worryingly to a double dip in the rate of decline of construction, which it must be said is an order worse than a double dip recession in actual construction output.

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