“In love” would be too strong a term for it. But the City is certainly feeling warm and cuddly towards contracting, a sector it has traditionally treated with frigid indifference.

The share price of many firms are the highest they’ve been for a decade. Morgan Sindall, for example, is £11 a pop; a decade ago it was 60p. A Kier share is worth more than £15, which is a tenfold increase.

This confidence has been brought about by good results from these two, along with Henry Boot and this week ISG and Galliford Try, the robustness of Balfour Beatty, record order books, and balance sheets strengthened by PFI assets. There is also a feeling that the industry works better than it did. One industry sage reckons that contractors used to pick one bad contract in six; now this ratio is more like one in 20, thanks to better management and closer relationships with clients.

It’s fair to add that contracting is not without its turmoil. Bovis Lend Lease and Costain seem to be operating a revolving door policy after poor financial results, but these sins have been indulged by the City because the firms’ underlying trading position is not bad.

Not so Amec, which is very much the City’s ex-girlfriend (see page 28). This is ironic because it was part of the move from contracting to “support services”, and its woes, which echo those of Amey, Interserve and Jarvis, are evidence that the experiment has not worked. That’s because calling a road contract “facilities management” rather than “capital works” doesn’t take away the inherent risks: whatever you choose to call them, mistakes get punished.

There’s always been pride in being a builder. Now they, and their shareholders, can reflect happily on the thought that there’s financial kudos in it, too.

How Southwark is making amends

Councils must accept some blame for urban degeneration. But Southwark council is showing at Elephant & Castle that they can learn from their mistakes. The Elephant was blasted by carpet bombing and then by carpet planning. Now Southwark is tackling its responsibilities in an entrepreneurial manner, nowhere more so than in its own Heygate Estate, an endless, system-built monstrosity. This time round, the council has picked 16 infill sites for the replacement mixed-tenure housing. It has mobilised housing associations to build and run the housing. It has commissioned cutting-edge young architects. And it has involved the tenants in the whole process. The result is fresh, exciting architecture, and a model for other councils to follow.