The latest forecasts suggest the drop in future workload will not be as large as forecasters had previously thought. Fantastic news, you might think. Well, think again

The recent upward revisions in output have come despite the fact the amount of cash netted by the industry remains the same. In simple terms, this means statisticians believe contractors have been doing more work than previously thought for the same amount of money. In other words, construction prices are falling faster than first thought.

A look at the Construction Products Association figures shows that, in the revisions made when the third quarter 2009 figures were published, almost £700m was added to the amount of work done in the first quarter, even though the amount of cash earned by the industry was flat.

While a rise in volumes is no doubt good news for the materials industry, if you are a contractor and still reading the forecasts on volumes as good news, here is a question you might want to ask yourself. What is better: to see prices drop 5% and workload drop 15%; or to see prices drop 15% and workload drop 5%?

Brian Green is an independent analyst, commentator and consultant working in construction, housing and property. Formally educated in civil engineering and then management and economics, his working career was formed in journalism. Since leaving his staff job as managing editor of Construction News in 1998 he has shaped a career based on media-related skills, industry and economic insight, and curiosity. He works for a broad range of clients, including Barbour ABI, Rider Levett Bucknall and EC Harris. He also edits the annual Housing Market Intelligence report. He sits on the Business Department's Consultative Committee on Construction Industry Statistics, the Construction Products Association's Economics Research Group and the Housebuilder Magazine editorial panel. View full Profile

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