It was the best of times, it was the worst of times
When Sunday Times economics editor David Smith addressed THE Conference, the all-industry conference in Cyprus back in 2005, he did so during a period of unprecedented growth and prosperity for the UK construction industry.
We didn’t really know it then, but that boom time had less than three years to run. When Smith spoke to the BMF Members’ Day yesterday, seven years later, it was at the end – possibly – of a period of unprecedented recession and hardship for the UK building industry.
Except, of course, for the fact that we don’t know whether we are at the end of it or not. And that was the main tenet of Smith’s keynote speech.
He showed us some very scary graphs – not all of which I understood – about Euro Area sovereign debt yields and quarterly economic GDP growth chart and said that the thing that really ‘did for’ the UK economy in construction industry terms was the sudden lack of credit available to SMEs and to householders.
“You can’t have an economy going from 10-15% credit growth to 0% credit growth without any consequences”. Well, quite so, and boy, have we suffered the consequences.
One of the unusual things about this recession, Smith reckons, is that inflation has not been seen off by it. Recessions, normally kill off inflation, he said. However, not this time round and that’s what makes it unusual.
The swingeing government cuts will continue – and the Conservative Party Conference this week indicates Georgie Osborne isn’t finished with us yet – as there’s no doubt in Smith’s mind that the fiscal gap needs to be plugged.
On the bright side, Smith’s ‘scientific’ show of hands poll yesterday found that the majority of delegates believe that there is some visible light at the end of the tunnel.
We probably aren’t at the end of this thing. We might be still in the middle, or, most likely, somewhere between the middle and the end. But not at the end. Not yet.