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Kier, Carillion, Balfour Beatty and Morgan Sindall have enjoyed sharp increases in their share prices since early July, suggesting that contractors鈥� market capitalisation has attained something akin to the v-shaped recovery that the real economy is still hoping to achieve.

The increase is largely a reflection of the performance of the FTSE 100, which has risen from 4,127 in early July to the cusp of 5,000 in the middle of this week. The City鈥檚 flirtation with economic optimism has been the signal for a return to old economy stocks like construction as a hedge against the still uncertain long-term economic outlook. The reason is that humble building contractors have greater certainty of earnings than they used to, thanks in part to their shift to service provision over the past 10 years, and of course the need for customers to plan projects well ahead. Contractors鈥� forward order books may not be as full as last year, but they are still guaranteed.

鈥淚t鈥檚 the bird in the hand,鈥� says Leslie Kent, an analyst at stockbroker JM Finn. 鈥淭he City can see what these companies are going to be able to deliver in the next year. You can鈥檛 say that about Marks & Spencer or a host of other companies, and that鈥檚 what鈥檚 driving their share prices.鈥�

On that basis, and notwithstanding Alistair Darling鈥檚 vague comments about cutting public spending, there still looks to be a bit of mileage in contractors鈥� share price recovery.