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Recovery that dare not speak its name

By giving us the opinions of the uneducated, journalism keeps us in touch with the ignorance of the community.

Sometimes it seems as though there are two – if not more – different economies out there.

There’s the one that is in all the papers and in the reports from industry organisations that show the economy is likely to slow, that the prospects for the rest of the year and next are less than rosy and that we haven’t even begun to see the scale of the problems yet as the pain from the swingeing spending cuts have yet to be felt.

And then there’s the other economy. The one that builders merchants – mostly, but not exclusively independents, are quietly talking about amongst themselves.

The one that is seeing a lot of merchants with record sales months and plans back on track for the sort of extravagance only dreamed of a couple of years ago – you know, stuff like refurbishing that tired old branch and expanding.

I mentioned this to someone the other day and he pointed out that of course merchants are pleased with the results in January because December was so badly snowed off as, indeed, were last January and February. He said that any merchant comparing month-on-month sales and year-on-year month sales were bound to be pleased, but that looking at the bigger picture, the figures aren’t so good.

He has a point, I suppose, but most of the merchants I’ve spoken to are taking the bigger picture into account. They are seeing that their frugality of the last couple of years is now paying off.

For some of them, dare I say it, the recession could be seen as a bit of a blessing. It meant that they were forced into economies that they might not otherwise have bothered with. It made them do more with less and that they are now reaping the benefits of those efficiencies is evident in the results, even if they aren’t shouting too loudly about them.

However, a few weeks ago Alex Hawkes (worth following on Twitter by the way @alexhawkes) wrote a piece in the Guardian which featured a builder who had lost a third of his employees in two years.

The scariest thing was the quote: “We used to build 10 to 12 new homes a year; we’ve built two over the last two years,”.

This guy and thousands like him, make up the bread-and-butter of builders and plumbers merchants’ businesses. If their orders dry up then so do the merchants’. I’m sure that a lot of these smaller builders have been turning their hands to other work to make up any shortfall – doing more RMI work instead of building houses, for example. But with VAT now at 20%, there is a very real concern, expressed in the article and by other Federation of Master Builders members, that this extra work could slow down too.

So, there is something of a recovery, certainly, but the sensible merchants are still keeping their heads down and building on their enforced efficiencies, because you never know what work might turn out not to be round the corner.

About Fiona Russell-Horne

Fiona Russell-Horne
Group Managing Editor across the BMJ portfolio.

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