The latest forecasts suggest the drop in future workload will not be as large as forecasters had previously thought. Fantastic news, you might think. Well, think again
The recent upward revisions in output have come despite the fact the amount of cash netted by the industry remains the same. In simple terms, this means statisticians believe contractors have been doing more work than previously thought for the same amount of money. In other words, construction prices are falling faster than first thought.
A look at the Construction Products Association figures shows that, in the revisions made when the third quarter 2009 figures were published, almost £700m was added to the amount of work done in the first quarter, even though the amount of cash earned by the industry was flat.
While a rise in volumes is no doubt good news for the materials industry, if you are a contractor and still reading the forecasts on volumes as good news, here is a question you might want to ask yourself. What is better: to see prices drop 5% and workload drop 15%; or to see prices drop 15% and workload drop 5%?