We live in confusing times. On one hand, we鈥檝e had a week of posturing by the Tories and Labour as each tries to outdo the other on the prickliness of the hair shirts they鈥檒l be forcing Whitehall in particular, and the public sector in general, to wear

On the other, there are glimmers of hope: house prices have now risen for three months running, car sales are up 11% on last year and Tesco鈥檚 and Sainsbury鈥檚鈥� profits are still growing.

So where are we?This week we published a guide for the industry in the form of our top 250 consultants鈥� survey. Unfortunately this survey makes depressing reading. Although last year the industry was skidding on black ice, consultants felt protected by Dubai鈥檚 manic building boom, Abu Dhabi鈥檚 petrodollars and healthy public spending. Indeed, 70% of them expected to recruit staff in the year ahead.

As we all know, things changed. The Middle East鈥檚 boom bombed and the real state of the public finances gradually became clear as the college programme crashed and burned and spending plans for health and education looked less certain. New orders dropped 25% in the year to June 2009 and consultants cut their staff by 7% or 20,000 people.

No doubt things will change again this year: Ray O鈥橰ourke鈥檚 comment that the 鈥渃onstruction sector lags the global economic cycle, and the industry鈥檚 most challenging period is still ahead鈥� doesn鈥檛 inspire optimism. But, despite the injuries they鈥檝e suffered, consultants are surprisingly optimistic. Our survey shows that 61% of them expect things to stabilise in the next 12 months, and 66% expect to leave staff numbers unchanged.

Alas, a glance at the latest forecasts tends to support O鈥橰ourke. Our economic analysis suggests that things are going to continue going downwards.

The concern for companies must be that even those gloomy assessments assume that big public spending programmes will not be axed or postponed. And the suspicion must be that George Osborne鈥檚 announcements at this week鈥檚 Tory conference are really a softening-up exercise. His proposed cuts are aimed at relatively easy targets. Delaying the start of the state pension was probably inevitable, and not many private sector workers are going to shed tears over a public sector pay freeze.

Nor will most voters care about the squeeze on tax credits for the middle classes. The trouble is, these cuts aren鈥檛 going to make a huge difference. We will only get an idea of what the parties are really going to do to capital spending, that other soft target, once they gain control of Whitehall. Both parties are following the rules of omerta on this subject. Martin Hewes, the economist who puts together our top 250, reckons public capital spending is set to fall 25% between the end of this year and 2013. Which means that those 66% of consultants who expect to leave staff numbers unchanged could be disappointed.

On the face of it, politicians鈥� promises about investment look safest in the area of high-speed rail, a topic mentioned approvingly at both main parties鈥� conferences. The Tories also spoke of the need to speed up the planning process for nuclear new build and offering incentives to councils for onshore windfarms.

Another policy outlined by the Tories is for households to spend up to 拢6,500 on energy improvements without any upfront cost (the money is to be paid back on owners鈥� utilities bills), a market said to be worth 拢2.5bn a year. Whichever party wins the next election is going to have to green the existing stock to meet our carbon reduction targets, so there will be work out there.

Whether this will be enough to balance out other capital spending cuts is impossible to say. For that you will have to wait for next year鈥檚 top 250 consultants 鈥�