When we published our third issue of this year with the cover line “The slump of 2008”, few of us could have predicted just how quickly the water would rise around the construction industry.
Our rather doleful review of the year tots up the tens of thousands of jobs lost and the dozens of firms that have gone under. Even outfits such as Pettifer Group, which survived many previous recessions, have disappeared beneath the waves, and the inflatable lifeboat that is government spending will eventually sink under the weight of public debt.
The dramatic tale of MJ Gleeson illustrates how quickly things have deteriorated in the wider industry. At the start of 2008, the Sheffield-based housebuilder employed more than 600 people; last Friday this was cut to 50 (not counting its social housing arm) as the prospective buyers of its homes were unable to find mortgages, regardless of how low interest rates or selling prices fell. Affable chief executive Paul Wallwork duly walked the plank.
Sadly, aggressive culling is still taking place across the industry. But the latest astonishing news is that Chris Holt, Wallwork’s successor, is planning to take the business into hibernation until the economic climate improves. As all schoolchildren know, this is only possible if the animal has built up sufficient reserves of body fat to live off. Or, in this case, has £20m of so of cash in the bank. Others might well envy Gleeson this option, but few will be able to emulate it. Firms such as Crest Nicholson and Countryside have cut jobs and slowed development, but if they or any of the larger players stop work they’ll shortly be entering an irreversible coma. Taylor Wimpey, Barratt, Crest Nicholson and all the rest with hungry bankers watching their every stagger have little choice but to press on until either the recession goes, or they do.
There was some good cheer for builders this week with the announcement from housing minister Margaret Beckett that there is to be a revised package to help new homes to be zero-carbon from 2016. The idea that the cost to developers could be capped at a certain level is a step in the right direction. Similarly, allowing builders to offset improvements to existing housing against the cost of new homes introduces welcome flexibility. Although it would be attractive to developers to make the most of the latter route, Beckett must limit their freedom of action. This is crucial if technologies such as the community power system in Swindon that we report on this week are to be economically viable.
The latest astonishing news is that Chris Holt, Wallwork’s successor, is planning to take the business into hibernation until the economic climate improves.
So this is Christmas, and after the year we’ve had the prospect of some escapist telly and a surfeit of creature comforts is even more appealing than usual. But as our round-up of 2008 shows, the gloom has been pierced by the odd shaft of light (our list includes Terminal 5, Crossrail, Barack Obama and some splendid shopping centres). The magazine has had its moments, too. Our readership passed the 25,000 mark, our website had more than 1 million page impressions in October and it now has more than 200,000 unique users. Then there are our prizes: the Periodical Publishers Association named us best subscription magazine and best designed business magazine, and writers Stuart Macdonald, Thomas Lane and Martin Spring picked up awards for their journalism. We’ll try to do even better next year (beginning on 9 January). Until then, thank you for your support over the year, and we wish you a merry Christmas and as prosperous a new year as possible.
Stuart Macdonald, deputy editor