It seems that what was little more than a throwaway line about more public cash being spent on construction in the three months to May than in any other recorded quarter has become a bit of a thing on the blogs and I fear that the meaning may have been misinterpreted.
So to clarify.
What was meant was that more “cash” was spent over the three months than in any recorded quarter. This was used for effect.
To get to this figure I took the current price series and made some (safe) assumptions about the amount of infrastructure that was in the public sector.
It is also probably true that if you were to use deflated figures you would come to the same result, that is, for instance, if you used the series for constant 2005 price series or adjusted cash for RPI.
In that sense one might argue that spending has never been higher in real terms. But there are huge problems here with the historic data that I’ll not go into.
However, if you were to infer from what I wrote that a greater share of the UK’s resources were going into construction now than in the past you would be wrong.
You would also be wrong if you inferred that the proportion of the construction workload that is publicly funded is bigger than at any time in the past.
What can be said is that the construction industry would be in an extremely dire state were it not for the support of the public sector.
The industry is struggling and faces more severe pain as the public sector retreats. This will almost inevitably mean big job losses in the short term and a burden on the state funds in terms of unemployment benefits.
How quickly the private sector can respond and fill the gap left by the retreating public sector is a matter of some debate, but in my view the answer is likely to be not very fast.