It’s unwise to make any reference to the economy when writing a monthly editorial comment in these turbulent times.
Last month, I talked about the collapse of Lehman Brothers; this month we’ve seen 20% wiped off the value of the FTSE 100 index (most of that in just one tumultuous week), a government rescue plan for our ailing banks and a co-ordinated 0.5% cut in interest rates around the globe. What will I have missed before this edition hits your desks?
The taxpayer’s stake in the likes of RBS, Lloyds TSB and HBOS, matched by similar moves across Europe and the USA, seems to have finally stopped the slide in global stock markets. Yet, what lies ahead for the UK economy is anyone’s guess.
The Construction Products Association has been forced to revise drastically its forecasts for the coming years after the financial crisis (page 7). The CPA is now predicting that the industry’s output will decline 7% over the next three years, with 2011 the earliest it can expect a return to growth. This compares with the CPA’s prediction of a 3% drop in output in its last report three months ago.
The housing sector will be the hardest hit but no-one is immune. Will the government still be able to afford its spending plans in health and education now it has been forced to pump so much public money into the banking sector?
Few who were involved in the construction sector in the early nineties will be relishing the months ahead. There are sure to be many casualties, and the m&e sector will be no exception. Yet, the industry must learn the lessons from the past and not fall into the same traps as it did last time. Can contractors really afford to ditch apprenticeships and risk deskilling the industry?
Health and safety is one area in which we must hope no corners are cut in the current downturn. Our in-depth focus points the way forward.
Electrical and Mechanical Contractor
Andrew Brister, Editor