One set of bad orders figures provides no real cause for concern. This data series can bounce around like a drunken kangaroo. It is a feature of the lumpiness of construction projects. But a second consecutive set of duff figures does start to set a few alarm bells ringing.
So the fact that the last two months have seen the seasonally adjusted figure for orders for new construction work more than 20% down on last year's monthly average is cause for concern. These were the worst months for new orders for four years.
What should start to get boardrooms thinking is that the lumpiest drop has been in the commercial sector. So there seems little room for the rather complacent view I sensed earlier this year that suggested "mainstream" construction would remain immune to the travails enveloping the house building sector.
Panic is never a good response, unless you are about to be mauled by a tiger, when I guess it may save your life.
Better to consider how to avoid a mauling in the first place, so it would seem there is reason for contractors to take a longer and harder look at how they might, should it come to that, deal with a fairly harsh recession.
Better too to take a more measured response than the actions of 88% of construction firms in the period 1989 to 1993, who in panic resorted to putting in lower bids, or the 88% who thought bidding for more work was the way out of the hole.
I for one am rereading The Construction Company in and out of Recession by Pat Hillebrandt, Jacquie Cannon and Peter Lansley, from which I pinched those statistics. Perhaps it should be more widely read as it clearly highlights plenty of mistakes from which to learn. Not the most glorious episode in the history of UK construction.
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