Trying to take the temperature of the economy is a fool’s game. Surprisingly resilient noises from J Sainsbury, Next and Debenhams earlier in the week have been drowned out by the latest dire figures from manufacturers. There’s no consistent pattern. But if you want to see how grim things might get, look no further than the housebuilders. This was the sector first into the downturn. Housebuilders have had longer trying to survive beneath the economic permafrost.

Bovis has done the job as well as anyone. It hasn’t quite retreated to a cave with canned food and a semi-automatic weapon, but it has already made difficult decisions and is dug in for a long siege, as yesterday’s trading statement reveals. So what are the steps in the art of hunkering down?

1. Cut your staff. There can be few private sector employers not mulling headcount reductions. Pruning staff by 5 or 10 per cent has become commonplace. But David Ritchie, Bovis’s chief executive, has gone much further, shedding 60 per cent of his workforce. He’s also had to dump an army of contractors, including brickies, chippies and plumbers.

2. Scrap your dividend. Around a fifth of listed blue chips are expected to reduce the dividend this year as they try to conserve cash. Bovis has gone further, axing its payout completely. It was not an easy decision, since it had prided itself on raising the payout every year since it floated in 1997.

3. Reduce your prices. The doctrine of holding firm on prices to sustain your brand and your margins is all very well in theory. But when cobwebs form on the front doors of your show homes, it starts to look like folly. Bovis cut selling prices by 16 per cent in the past year to an average of £150,800 in what it calls its “assertive” pricing policy. Assertive or plain desperate, companies have no choice but to cut selling prices to the point where sufficient income comes in to pay the immediate bills.

4. Cut your production. Bovis has mothballed many of its estates and reduced new building to a minimum. The pain of having capital uselessly tied up in half-built projects is less than the agony of having capital uselessly tied up in completed buildings.

5. Do battle with your bankers. Bovis has managed to have a difficult covenant removed, but at a high price. It was previously borrowing at 0.45 per cent over Libor; now it is paying 3.5 per cent over Libor, an eyewatering eightfold increase in the spread. The scary thing is, this is the new norm for corporate borrowers.

Of course, what is rational for individual companies is anything but optimal for the whole economy. If everyone were to do a Bovis, then the recession would certainly sour into a depression. That’s the paradox facing policymakers and business leaders.

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