I feely admit that this time last year I was one of those saying that we shouldn’t talk ourselves into a recession when everyone seemed to want to wallow in bad news. Am I being inconsistent in saying that it’s too soon to call the bottom of the recession?
I felt really uncomfortable reading TTJ’s lead news article highlighting some snippets of good news as hope for the future. It struck me as desperately grasping at straws in order to write something positive.
I think this flies in the face of all the economic data. The immediate banking crisis may be over (although there is still talk of another to come but the credit crunch persists, despite all that quantative easing. The economy is contracting; consumer spending is falling; the mortgage market is on the floor, despite the lowest interest rates in history. The Construction Products Association has produced its gloomiest forecast ever for the construction sector, predicting the worst fall in output since 1980 and the lowest peace time housebuilding figures since 1924. The underlying problems in the US housing market, German manufacturing and the Japanese economy, all of which influence our own, remain unresolved.
BWF members tell us every day, every week, how tough it is out there. Some of the housebuilders may have started building again, but it seems to be almost on a plot by plot basis. The second quarter of 2009 has seen business picking up, but so many saw things plummet at the end of 2008 and stay low after the turn of the year. There are still pockets of activity. The smaller, more specialist companies often report that they are busy; there are still people with money who are willing to spend it. And those working on schools, hospitals and other public sector projects have no shortage of work. But even those doing well say that they are running twice as fast as they were a year ago to maintain the same pace. Sorry, I don’t think it helps anyone to call the upturn before it happens, just as I thought it was wrong to talk about a recession before we’d got there. And remember that in previous recessions, housing and unemployment have lagged behind the main economic indicators, so there is still plenty of bad news to come. Even when the economy turns – and my money, for the little it’s worth, is on the end of the year – there will still be a lag until we see a clear upturn in construction, and a further lag before that upturn reaches the joinery sector. You can play the glad game as much as you like; to me, talking things up too soon is just a recipe for making the bad news feel like a bigger set-back. We need to be realistic about where we are and where we are going to be in the coming months