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Mr. Cholmondley-Warner

Construction Sector Forecast

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I work in the construction sector, very much carnage all round at present

Link to forecast paper from Davis Langdon, large international consultancy firm

http://www.davislangdon-uk.com/upload/Stat...orecast0709.pdf

Lots of interesting stuff here particularly comparison with past recessions of 70's and 80's. See except below.

Fall in output

Price forecast

What is the likely impact on prices this time around? So far, they have fallen 10% and probably have further to go. Prices are not expected to fall as far as they did in the early nineties because they did not rise as steeply over the past few years.

The earlier recessions may have more to tell us about this one, but in truth, each has had different characteristics and underlying conditions. Neither of the earlier ones experienced much construction deflation but both were at times of high general inflation; stripped of general inflation, prices may have fallen against the general economy by around 30%. Both periods showed a drop in workload in excess of current forecasts, providing a degree of comfort that prices this time will not slide as far. However, it does seem likely that a 20% drop in prices from the peak in the second quarter of last year will occur before stability returns..

They don't see an end to the slide in the sector till 2011. Puts a dampener on those V shaped recoverists.

Of course construction always lags the economy on the as things improve but suggests a long way to go yet. Kind of lends itself to the deflation argument I guess.

I generally agree with their view point, inflation is a funny thing to predict but black cat in a dark room and all that

Edit: Thanks to Eric for formatting

Edited by Unknown

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I work in the construction sector, very much carnage all round at present

Link to forecast paper from Davis Langdon, large international consultancy firm

http://www.davislangdon-uk.com/upload/Stat...orecast0709.pdf

Lots of interesting stuff here particularly comparison with past recessions of 70's and 80's. See except below.

They don't see an end to the slide in the sector till 2011. Puts a dampener on those V shaped recoverists. (sorry about crap format didnt know how to change it)

Of course construction always lags the economy on the as things improve but suggests a long way to go yet. Kind of lends itself to the deflation argument I guess.

I generally agree with their view point, inflation is a funny thing to predict but black cat in a dark room and all that

I too work in the construction industry and i would say that along with banking, construction has been leading our economy since 2001/2002.

Edited by i'm Alan Partridge

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Price forecast

What is the likely impact on prices this time around? So far, they have fallen 10% and probably have further to go. Prices are not expected to fall as far as they did in the early nineties because they did not rise as steeply over the past few years.

The earlier recessions may have more to tell us about this one, but in truth, each has had different characteristics and underlying conditions. Neither of the earlier ones experienced much construction deflation but both were at times of high general inflation; stripped of general inflation, prices may have fallen against the general economy by around 30%. Both periods showed a drop in workload in excess of current forecasts, providing a degree of comfort that prices this time will not slide as far. However, it does seem likely that a 20% drop in prices from the peak in the second quarter of last year will occur before stability returns.

Better? :P

Edited by eric pebble

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Been comparing some develoment appraisals of late, have noticed costs coming down on slowly. Thisis good for developing more affordable housing, though really any slack is swallowed up in a slight increase in land prices. Developments just ain't stacking up right now.

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