The latest construction research note from the surveyors' trade body RICS takes an interesting look at the current state of the US and UK construction sectors. The underlying question RICS asks is whether the UK industry will follow the US into a recession.
The headline grabbing data from the US are disturbing - housing starts down 54% from the 2005 average and a 34% drop in the value of private house building since February 2006. These are not figures that would be welcome here in the UK.
There is a big dent in overall US construction workload, as housing represents a bigger slice of the construction pie there than in the UK. But there has been balm to rub on the sore - a rise in non-domestic private work held the overall fall in private sector spend on construction to around 8%. And the public sector cranked up construction spending.
But this failed to stop a haemorrhaging of jobs - RICS refers to one survey that puts construction job losses at 12.4% since it peaked in September 2007.
And RICS concludes that the pain for the US industry is far from over. It can expect further contraction, particularly as a slump in commercial property prices looks like damaging prospects for office and retail work.
As to whether such a cold wind is set to ravage UK construction, RICS makes some soothing comments. Housing in the UK represents less of a share than in the US. UK construction grew less rapidly in recent years than in the US. The surge in private non-residential building work has been less pronounced. And looking further forward, RICS sees PFI spending providing support for the industry.
But it does see that "the skies are darkening", although UK construction should fare better than in the US.
The likely casualty, according to the note, is the level of employment. Labour productivity has degraded over the past few years and this makes the labour force more vulnerable.
RICS predicts that if the industry stands still in 2008 then it will shed about 2% of its jobs - a loss it puts at 41,000.
Painful possibly, but the pain may be eased if, ironically, the slump in the construction workforce coincides with a reduction in the numbers of Eastern European workers as the tide turns and they look to take their hard earned cash and much applauded skills back home.
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