The Economic Sentiment Survey for January is out, and while browsing through the data Eurobee has picked out some interesting trends.
First of all it is remarkable how well you can see the dot.com bubble crash in 2000 and the 2008 financial crisis on the graph below. The graph represents the public’s confidence in the economy. It’s predictably low in 2008, and then climbs steadily upwards until early 2011, when Greece’s collapse causes it to tumble again.
January 2012 economic sentiment in Europe
But check out these two babies, the graphs for citizens’ trust in builders, and bankers.
Trust in builders
Trust in bankers
As expected, trust in bankers plummeted in mid-2008, and then again with the Eurocrisis. But trust in builders plummeted in late 2007 and has stayed relatively low ever since. Why is that?
It seems that trust in bankers goes up and down with the press coverage of the financial crisis. Bankers have been at their game ever since the mid-90s, when Europe’s financial centre underwent drastic change in the New Economy. The financial crisis of 2008 unveiled their “improper” behaviour, and their image plummeted. But then came rescue funds, banks were bought up by the government and city financiers promised to behave better – all music to the average European’s ears.
Of course, as we know, bankers went on as before, only the press grew tired of the story and Michael Jackson died, so by mid-2010 bankers had reached their previous level of trust. Well, until the Eurocrisis revealed that nothing changed…
But what of the builders? I must admit that I have no single explanation (but then I am neither an economist, nor a builder).
One reason might be the influx of cheap but high quality construction workers and handymen from Eastern Europe after the extension of the EU in 2004. This was the age of the stereotypical “Polish builder”, who did a great job and was cheap. But within a few years from joining the EU, several Eastern countries experienced unprecedented economic boom and financial influx from EU structural funds. This meant loads of construction work, and the builders happily returned to their homes – leaving Western Europe with their traditional builders, who were much more expensive than the Poles, often less reliable and hard to get hold of, as a good builder is always in great demand.
Western Europeans have forgotten the billions of euros of their tax money being spent on rescue funds, but they remember paying €150 extra for getting that door fixed.
In the South, another problem added to the low reputation of builders. Spain and Portugal experienced incredible real estate booms before the financial crisis, with construction peaking in 2006. Houses rose from the ground like mushrooms, with the only goal to finish quickly and sell. It has since become clear that many of these houses were build with substandard and cheap materials to maximise profits. Many owners of new-built Spanish homes can tell you of the troubles with damp ceilings, ill-fitting windows and dodgy plumbing. Again, the financial crisis happened in an untouchable sphere, but the building crisis affected people quite literally “on the ground”.
Poor builders, they deserve better. Certainly compared to bankers!
