Brickonomics

So the latest stab by the Construction Products Association to make sense of the economic chaos suggests that construction output will fall 7% over the next three years. That is a loss in cash terms of about £8 billion in work by 2010. The pace of decline in sentiment within construction is powerfully illustrated in the latest forecast from the association which is decidedly gloomier than the forecasters expected when they put numbers to expectations in the summer. The forecasters…

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The latest new orders figures and CIPS survey leave little if any room for doubt, construction is dropping into a recession fast and the drop looks deep. The more worrying thing about the figures is that last year forecasters were looking to the private sector to make up for expected falls in publicly funded work. But it is only a solid level of orders from the public sector that is halting a much deeper fall in construction work being let….

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The most profoundly worrying thing about the latest Nationwide house price index press release was a comment from Fionnuala Earley, the building society’s chief economist, which I think, in the context it was placed, was meant to be soothing. Now I may be misinterpreting her words, but either way they are anything but comforting if looked at in a wider economic context.

Despite a slowdown in workload, particularly in house building, the construction industry is spending more than ever on imported products and materials.

I wasn’t expecting it. I had a ring round of some long-standing contacts that I speak to fairly regularly. I guess I last spoke to them a couple of months ago, as things were starting to look a bit stickier with the figures heralding a dip in construction output. My chat with them yesterday was a shock. “We are seeing jobs won at 1991 prices,” I was told.

The latest release of the Case-Shiller index shows that house prices in the US have now fallen in every month for the past two years. The price of an average US home on the 20 city index measure is now 19.5% cheaper than it was in August 2006. But in some cities prices have fallen significantly more. If you gambled on buying a house in Las Vagas in December 2006, you would have lost 34.5% of your stake. In Phoenix,…

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If the health of the housing market is a function of turnover and price growth then the amount of stamp duty taken from residential sales should provide a fairly good means of diagnosis. In rough and ready terms. So it was interesting to see how each region fared in the regional resi tax-take stakes.

What is all this about the “particularly hard-hit buy-to-let market” I keep hearing about in reports about the demise of Bradford & Bingley? The thing is, I tend to follow the figures a bit and was not aware of any of the “reliable” variety that had pointed to BTL being “particularly hard hit”. Indeed, I had been a bit surprised at how well it was holding up when I read the latest data from the Council of Mortgage Lenders.

A snap survey by RICS has backed up the figures produced by Hometrack that homebuyers are demanding increasingly savage discounts from sellers. Hometrack puts that average discount at 10%, whereas RICS suggests 9%. But either way there will be a spread around that figure, so there will be some pretty deep discounting being accepted by sellers keen to rid themselves of their property. As mentioned before, place these numbers against the data on asking prices produced by Rightmove and it…

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There is further evidence that the housing market is grinding to a standstill in the latest monthly figures provided by Hometrack. Hometrack figures put the annual drop in average prices at about 6.2%. This is a more modest drop than the figures produced by Nationwide and Halifax, but as I have mentioned before I challenge anyone to come up with a meaningful “average” house price at the moment. Leaving the scale of the drop in prices to one side, it…

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