Within the construction sector, housebuilding appears to be the worst affected by the deteriorating conditions. Building firms' stocks have generally had a steady start to the year. The shares of major contractors Amec, Mowlem, and Carillion have even enjoyed double-digit growth since January 1st. The stock market by comparison has suffered a 10% fall.
Less stunning was the performance of aggregate producers but they still managed to outperform the stock market by a respectable 2.2%.
The perky performance of contractors' shares reflects the billions being invested by the government in the public sector. While there is little cheer in the declining commercial sector, money targeted at schools, hospital, and infrastructure is helping to provide investors with somewhere to hide from the bears.
Housebuilders' shares are falling because the markets are fearful of a weakening in consumer spending. Falling house prices in London are already offering evidence of a looming property recession.
It's hard, though, on those listed housebuilders whose share prices never properly reflected the large profit margins and turnovers generated in recent boom years. Many will be tempted to go private, which should ease the raising of capital and prevent acquisitions from being scuppered by low share prices.
Undervalued contractors may be tempted to go the same way. Those involved in PFIs will have an extra incentive if a new accounting practice is implemented that would result in the transfer of millions of pounds of debt onto corporate balance sheets.
This will happen if contractors can no longer assign debt incurred on PFI projects to the special purpose vehicles (SPVs) created to build the project. The accounting rule came about in the US following the Enron scandal, and now the International Accounting Standards Board is considering whether to adopt it in the UK.
A move to force greater disclosure could hit contractors hard. Earlier this week it was revealed that the top five PFI companies have £2bn of debt hidden away in more than 75 SPVs. The practice is within current accountancy rules because contractors only hold a small stake in most contracts with banks and other financial institutions holding most of the rest.
Companies going private wouldn't have to face the scrutiny of post-Enron accounting rules. Those that stay public may soon find it difficult to present balance sheets that don't scare the wits out of analysts.