Last week’s revision of the scale of the recession only deepens the puzzle of how well the labour market has performed. The Office for National Statistics now reckons output fell 7.1 per cent from its peak at the end of 2007 to the trough in the second quarter of 2009, rather than its earlier estimate of 6.4 per cent.

Yet employment dropped by less than a third of that rate – by 2.1 per cent from end-2007 to its low point in early 2010, far less than in previous recessions. Unemployment rose from 5.2 per cent of the workforce to 8 per cent – below the 10.7 per cent reached in 1993 or 11.9 per cent in 1984. Various reasons have been put forward, among the most persuasive being the notion that employers hung on to more staff, especially skilled ones, to avoid past problems of being short-handed when the upturn came. Low interest rates meant fewer insolvencies. Whole industries did not collapse. There were wage freezes, part-time work and a certain amount of shorter working hours, although it is uncertain whether these factors were much greater than in the past.

Some economists suspected the drop in output was less extreme than estimated, but the revision suggests the opposite. In a flexible market you expect employers to shed a lot of jobs, as happened in the US, leading some to suggest rigidities have crept into the UK market – but I have not come across many employers who complained they could not make redundancies because it was too expensive or they feared tribunal claims.

It may be years before we fully understand why the labour market behaved in this way. It has been good for workers but there is a downside: falling productivity, coupled with low investment and a loss of productive capacity, looks set to constrain future economic growth potential.

We are likely now to see a period of unemployment rising from the current 2.51m as public sector jobs cuts bite and job creation slows, though probably not to the 3m or 3.5m once predicted. Beyond that, few would be surprised if the labour market recovery was slow over the next few years. But the market has defied expectations at every turn, so I hesitate to call this a forecast.

Banx illustration

Brutal choice

Preston Bus Station, completed in 1969, is arguably Britain’s most divisive building. The World Monuments Fund is the latest body to call for this “brutalist” concrete structure, due to be demolished to make way for an open-air shopping mall, to be saved.

Brutalism is a phrase used by Le Corbusier from the French béton brut, or “raw concrete”, rather any implied thuggishness about the architecture. Birmingham Central Library, another modernist building due to be demolished when a new library opens in 2013, is also on the WMF’s watch list.

The Preston building has twice been refused a protective Grade II listing by central government despite English Heritage’s recommendations. Lend Lease’s new Tithebarn shopping development will ironically be designed by Building Design Partnership, the bus station’s original architect.

Many locals consider the bus station dirty, smelly and frightening, but a Lancashire Evening Post poll last year showed it was the most popular building in Preston, beating neoclassical monuments such as the Harris museum.

Notebook wonders whether, with a little imagination, the bus station could be revitalised and retained within the development. The UK already has too many dull, identikit shopping malls. But these straitened times do not leave much room for the unusual.

North-south switch

Some coalition objectives seem to conflict with each other. Its new homes bonus, an incentive for English councils in which the government matches council tax for six years, aims for a much-needed boost to housebuilding. But it also looks likely to shift spending from north to south, militating against the aim of rebalancing economic activity away from south-east England.

The National Housing Federation reckons the north will lose £104m ($162m) a year while the south gains £324m, because funding will come partly from top-slicing grants to councils. The Northern Housing Consortium, which has made similar projections, is calling for the bonus to be fully funded by the Treasury. Even though money is tight, it has a case.

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