The never-ending build up to the war with Iraq is making markets nervous and threatening to tip the global economy into recession. The construction industry may not be immune
No shots have yet been fired but some contractors are already counting the costs of a war with Iraq. The call up of 1000 reservists from the construction industry has left small some contractors and consultants without staff in key posts.

Companies have been caught out by the suddenness of the call up. Military papers were sent out last week ordering Territorial Army reservists to join their regiments. And if firms want to hold onto key personnel they have to act quickly. Firms only have seven days to convince government officials that call-up notices should be revoked on the basis that the loss of a key employee would harm business.

It's not just the small firms that are feeling the affects of the military build up. Companies are delaying spending decisions as they wait to see what the outcome of the Iraqi/American stand off will be. This is affecting companies in all sectors including Skanska, which says its construction business is likely to shrink this year because of the uncertainty over the war.

Markets are also jittery: on Friday the price of oil rose by a dollar because of an explosion at an American oil depot: it wasn't a terrorist act, but to nervous traders it felt like it. And while we're on a war footing share prices will remain depressed as investors transfer their money into safe havens such as gold and bonds.

Those hoping for a quick resolution to the crisis will be disappointed. Tony Blair is loathe to go to war without the backing of the UN because of the huge strains it would put on relationships with European allies opposed to the war. A unilateralist war will also be politically risky and will alienate millions of Labour supporters a year ahead of the next election.

Some sections of the construction industry have been vociferous in their condemnation of the war. New Labour supporter Lord Rogers was one of 20 architects who put their names to an anti-war newspaper advert. He and many others in the industry also took time out to attend the recent mass demonstration in London. In the Building web poll 50% of respondents also said they were opposed to any kind of war.

Blair will be doing his utmost to persuade European and Arab doubters to side with the US, but this won't happen overnight. Saddam will buy more time making concessions to inspectors, which means buinesses activity will continue to be put on hold