Chief Executive’s Blog: The Long Cold Path To Recovery

If last week’s snow initially prolonged the Christmas spirit into the New Year, the bleak outlook for the weather and the industry that followed has made it feel like the cold, dark depths of winter. The Construction Products Association’s Forecasts make grim reading, with the prediction of a further 3% overall fall in construction output during 2010, and precious little growth in the three years to follow.  Even the brighter moments are clouded: double-digit annual percentage growth in private housebuilding throughout the three-year forecast period still means that housing starts in 2010 will only reach half of what they were in 2007, climbing to 25% below the 2007 figure in 2013. I expected the economy as a whole to have turned by now.  However, the British Chambers of Commerce’s latest economic survey reports that the economy was ‘on the brink of leaving recession’, despite the spending spree over Christmas and before VAT went back up. That’s ‘on the brink’; not out yet. I had a real sense of the mood lifting towards the end of last year.  Spring was better than expected, summer was good, and business overall did not slow until well into November, in contrast to the sudden fall-off at the start of the previous October the previous.  But the joinery industry is always quiet in the first quarter, and I suspected that 2010 would not really get going until the spring.  It was always going to be another tough winter. What worries me now is how fragile the recovery is expected to be.  The CPA’s Chief Executive, Michael Ankers, spelt out his concern that whichever party wins the Election will cut spending on construction investment before the private sector is again strong enough to sustain the recovery.  I still don’t see the movement in liquidity needed to drive the recovery in housebuilding or support businesses as they grow.  Too many people and businesses are holding on to their cash.  And an economist friend has told be that he spends most of his time watching America at the moment, because he still thinks there’s more to come from there. We’re all treading carefully at the moment.  Let’s hope we can avoid the slips and broken bones. Read the news item on this topic.