Construction Activity slowed in January compared to the previous month – the first time the CE Barometer has seen a month-on-month decline since it was launched in 2006. It was a close call with a balance of -1,1% of respondents saying activity had slowed, but at the same time it was the third straight month of weakening sentiment. The balance figure is the percentage of respondents giving positive responses, minus the number giving negative answers.
But although current activity levels fell in January, the industry was still up beat about the future. A balance of +22,5% of respondents said they expected activity levels to be higher in a year's time.
This is interesting as far as our ‘clock' is concerned. Throughout 2007, the industry was saying current activity was increasing and its expectations about the future were high, so the arrow of the clock was in the ‘Boom' segment. With current activity falling but the future still bright, the arrow has moved backwards, compared to what would be expected in a normal cycle to indicate the industry is in an ‘up turn'. Normally of course a downturn would be expected after a boom.
Data shows however that the construction industry has a tendency for over-optimism about the future. For example, in January last year a massive balance of +61,3% of respondents said activity would be higher in 12 months' time. However, when the January 2008 survey was complete, a balance of only +31,5% of people said activity was higher then a year ago.
Clearly there was a big disparity between what people expected and the activity levels that came to pass in 2008. If this misplaced bullishness is still a factor, it could mean the industry is facing a more difficult time than previously thought.
CE would like to thank all those that took part in the January survey. It was completed by more than 300 construction professionals in 28 countries around the region.
The survey, which takes just one minute to complete – is open to all construction professionals working in Europe. Those that take part in the survey will be given access to each month's results on the Internet prior to their publication in CE.