The bad news is that the construction industry is 20% down on where it was before the financial crisis. The good news is that it will return. The middling news is that we may not get all 20% back.
HSBC economist Mark Berrisford-Smith last addressed a BMF Conference in 2004, long before the economy imploded.
“Back then” he said, “economics didn’t really matter, we used to spice it up with jibes about the French or politicians – Gordon Brown, lightening a room by leaving it. In 2009 the jokes stopped when the money ran out and it became obvious that the audience just wasn’t up for it.”
It’s the Eurozone crisis at the back end of 2011 that is the one that really scared Berrisford Smith, he said. “But things are getting better. Let’s face it, the BMF has gone abroad again.”
“What about us in Britain? How we doing? Good news, it is getting better. > I can’t promise that it will stay better but it is definitely better.
“We thought we had a double dip recession; in all probability we didn’t. All the evidence suggests our economy is moving up a gear – moving towards 15mph rather than 5mph, but in the right direction at least.”
Berrisford-Smith forecast the possibility of getting to the “dizzy heights of 1% growth”. However, the recovery will be uneven.
“Some bits have done well, some bits have done badly. Are these bits in long term decline? Will they make up the ground? Economy about 3% short of where it was in 2008. Will we get back to that level by 2014? Construction is 20% down, manufacturing 10%. Oil & gas 10% down Will all those sectors make up that ground? Not unless we frack the hell out of Lancashire. Manufacturing – jury still out.
Construction, yes it will come back. The only question is, how long will it take? Of these sectors, construction is the only one that will fully recover.”