The impact of the economic stimulus on construction is clear when we look at the phenomenal growth the industry enjoyed in 2010.
The latest set of construction output figures put volume growth for 2010 at about 6.2%, although the amount of cash pocketed by the industry rose by just 3.8% as a result of falling prices.
In volume terms this represents the biggest annual jump in output recorded since the late 1980s boom.
And by the time the statisticians at ONS have revised the figures we might well expect to see the official growth rate at nearer 7%.
On the face of it this is pretty impressive achievement given that much of January and much of December suffered from a “white-out” as inches of snow stalled ongoing work.
What is more the industry was in free-fall in 2009, so as turnarounds go that is pretty spectacular.
And the latest figures bring more good news with the data suggesting a fall of just 2.5% in output in the final quarter, compared with the 3.3% suggested in the figures for the preliminary estimate of GDP.
This was expected. The trend since the slight tweak to the processing of the output data in September has been to revise previous months’ figures upward as late returns from contractors are processed.
This is the reason we should expect the 2010 growth rate to rise further – although revisions can go up as well as down.
The upward revision of the estimate for construction output will cheer those looking at the macro economy. Other things being equal, this fall in construction output will most likely be further reduced and the net effect will probably be to add 0.1% to the final quarter GDP growth figure.
There will of course be those who are suspicious of these figures. But, in support of them, there was a more coordinated recovery in new work than we would normally expect.
And the surge in public spending on construction was quite extraordinary. Work in the public non-residential sector rose by a third and work on public housing all but doubled in the year.
That said concerns will persist over how representative of reality the figures are, while any comparison with past out figures is fraught, as what was measured before 2010 is not the same as what is now being measured.
But what we can be sure of is that 2010 was a much better year for construction that 2009.
The bad news in the latest figures, however, is that they appear to support the forecasters’ view that construction is about to head into decline again.
Even taking the snow into account the final quarter figure suggests that output is falling away.
And with public sector spending set to dive, there is little sign that the private sector is picking up.
On that basis 2010 may well be seen in time to come as the year when the industry managed to bob its head above water to gasp for air before submerging back into recession.
Mind you that breath of air supplied by the economic stimulus might well prove vital. Without it the industry might well have been more severely ravaged by what is looking like a sustained period of recession.