Something that has been puzzling me for some while is why bigger contractors were so slow to accept their may be a recession coming.
Up to about springtime in various conversations with fairly senior folk and in notes I'd read from main contractors I noted an air of confidence and talk of growth within their ranks. I found their mood a little unsettling and strangely at odds with what I was hearing from smaller firms.
From where I was sitting the likelihood of a nasty downturn seemed pretty high.
Well, I think I may have found an answer to this seeming paradox in the more detailed orders figures. And, if my suspicions are right, it raises some worrying issues regarding contractors' ability to smell trouble ahead.
If you look at the figures for larger contracts there are some interesting patterns. Basically from the start of 2007 on a quarterly basis big contracts have accounted for an ever increasing slice of the new orders cake.
So, for instance, in the first quarter of 2007 the top 20 contracts accounted for about 17% of the new work let. In the third quarter of 2008 the figure was 29%. That being so it means that proportionately there has been less in the way of smaller contracts.
I did a bit of slightly finer-grained number crunching looking at the figures for contacts above £2 million. This allows you to exclude housing work if you wish to.
Now, as I have said before, the orders figures need to be treated with caution and it is always wise to be a bit sceptical of any obvious conclusions.
But here is some of what I found.
I compared the six months to March 2008 (more or less the first six months after the credit crunch bit) with the same period a year earlier.
For contracts worth more than £2 million there was an increase in cash terms of just over 7%. Take housing out and the rise was nearer 17%. Much of this was from a boost in public sector work and from infrastructure work. And commercial work was still rising.
For work worth less than £2 million there is a different picture, orders fell about 5%. Taking housing out they fell by a bit more than 1%.
Now compare the six months to September 2008 with the same period a year earlier and we see a distinct darkening of the picture.
For contracts worth £2 million plus we see the level of orders down in cash terms by the best part of 19% and even when taking housing out of that there was a fall of about 15%. What is of interest is the marked decline in commercial work.
For contracts worth less than £2 million there was also a fall in work over this period of 21%, but when housing is taken out the fall was just 8%.
Looking at these figures in the light of my puzzlement over the seeming complacency I felt was evident among larger contractors and it leads me to a rather unsettling conclusion.
Main contractors use as their primary sensor of future prospects the run of orders coming in.
Despite the credit crunch the bigger players saw an increase in orders in key sectors of their business. It would seem that this blinded them to the possibility of a broader construction recession and reinforced their view that the impact would be restricted to house building.
If this was their view, they were wrong.
But it is an issue of greater concern if main contractors are relying on such a narrow measure for their primary indicator of future business.