Those involved with construction seem strangely confident as we move into 2008. Don't they know there's a credit crunch out there waiting to get them?
Apparently they do, but it just does not look like all that much of a worry from where they are sitting. That’s because the big contractors, such as Balfour Beatty and Kier, have bulging order books that suggest both they and associated industries - such as engineers and tool hire companies - will have plenty to occupy them in the new year.
What's more, much of the business on which those order books are based should be relatively resilient to recent economic wobbles and, therefore, should not be in danger of getting pulled. For example, spending on things like the 2012 Olympics, new roads, schools, hospitals and social housing, all looks pretty assured.
But the credit crunch has bought reasons for concern. With commercial property prices falling and credit drying up, development projects could well start being pulled. Nevertheless, this chill wind should be offset by the fact that the amount of risky speculative commercial property development this cycle has been relatively subdued.
So, while conditions could worsen next year, construction still looks in pretty good shape.
