The latest construction new orders figures from the Office for National Statistics provide little comfort for an industry seemingly trapped in a long running slump.
Look through the volatility and we see a new stability, so things don’t appear to be getting much worse.
But the level of new orders won is running at about two thirds of peak.
What makes this disturbing is that it the volume of orders being won has been about the same level for the past four years.
If we compare the volume of orders won in the past 16 quarters with the previous 16 quarters there is a drop of more than 30%. This has not been reflected in the drop in output of new work, where there was a drop of just 17% between 2007 and 2012
There are reasons for this. Many of the orders won in the years running up to the crash were large long running projects. Some were on hold and the work fed through later.
So it is reasonable to see the peak in new orders as a surge that wouldn’t necessarily be reflected in a corresponding surge in output. But that doesn’t hide the fact that the level of new orders won at present remains shockingly low in a historical context.
Not since the darkest days of the 1980s have we seen such a sustained period of low volumes of orders.
Even in London which has been the least hit part of Britain the value of orders (in cash terms) is down a quarter from peak.
While the relationship between new orders and construction output new work is not straightforward, it is hard not to conclude from these figures that there will be plenty of tough months ahead. Even then there is nothing in the data to suggest an upswing.
Below are a few graphs: