Reading the news in the FT that Merrill Lynch's Mark Hake, the longstanding construction industry analyst, has downgraded house builders was not good to hear.

But more worrying to the industry as a whole is that he seems to be suggesting industry volumes will drop by a quarter this year. That is huge. It is as large as the peak-to-trough fall in the housing recession of the early 1990s.

I haven't seen the detail of the note yet and imagine there must be some nuance in the definitions, but if what he appears to be suggesting turns out to be close to what actually happens on the ground, then a construction recession this year suddenly looks much more likely. Which leads me to believe I am missing something.

But it is worth looking at the figures...

The private house building sector provided more than 16% of all construction work, amounting to £20 billion in current prices last year. This is a big hit.

So, roughly speaking, a 25% fall in house building actitivity would translate into a £5 billion or 4% drop in output overall.

The relationship between output in housing unit terms and output in construction terms is not linear and the impact on construction will very much depend on what sub-market (flats, luxury homes, retirement homes) is hit hardest. There is also the paradox that work on flats under construction may speed up with house builders keen to complete and sell asap.

So the impact is unlikely to be straightforward and simultaneous in time, place or by product.

But whichever way you cut it, on the face of it this report is very scary.