EDITORIAL COMMENT

Recently, CJ's mailbag has yielded a steady trickle of press releases from companies claiming they have never had it so good. Usually these chipper promos are from small contractors that wouldn't normally command a mention. However, with an entrepreneur's eye, they have spotted the chance to become newsworthy by bucking all the talk of a downturn.

Meanwhile in industry lunching circles it is now common to hear complaints that Johnny Media is talking the country into recession. National newspapers and the broadcasters are the ringleaders, though we are pulling together in our efforts to talk the country down. Unless we all stop doom-mongering, the argument runs, we shall create a self-inflicted downturn.

The trouble with this line of thinking is that there are limits to what positive thought can achieve. Avoiding the gloom may bolster confidence, but it cannot sustain demand. A chipper industry is not necessarily a busy industry.

Unfortunately the evidence of weakening demand is there to see. The housing sector - bellwether of consumer and construction activity alike - has been weakening for months. House prices are levelling off, and both starts and completions are falling.

On the contracting side, for the first time in three years more companies expect orders to fall than to rise.

But the real hazard is not that lack of confidence will trim demand, rather that it will prompt a run on tender prices. If so, contractors will only have themselves to blame. Lopping 5 per cent off a tender is not simply a reflex reaction to reading bad news in the FT, it is a conscious decision. It is up to them to stand firm and resist any temptation to return to buying work. Or for that matter, minimise exposure to tendering altogether...