Construction buyers report steepest work drop in a decade

Grant Prior 2 months ago
Share

The Covid-19 crisis caused construction output to fall at its fastest rates for nearly 11 years in March.

The bellwether IHS Markit/CIPS UK Construction Total Activity Index slumped to 39.3 in March from 52.6 in February.

It was above the 50 no-change value in February for the first time since April 2019.

But Covid-19 has sparked a dramatic slump across all sectors with business optimism also falling to its lowest level since October 2008.

Construction companies also recorded intense supply chain pressures in March due to reduced capacity and shortages of stock among vendors.

The latest lengthening of lead-times among vendors was the steepest recorded since October 2014.

Lower workloads and business closures resulted in a marked reduction in staffing numbers across the construction sector during March.

The latest survey indicated the steepest pace of job shedding since September 2010.

Tim Moore, Economics Director at IHS Markit, which compiles the survey said:“March data provides an early snap-shot of the impact on UK construction output from emergency public health measures to halt the COVID-19 pandemic, with activity falling to the greatest extent since the global financial crisis.

“The closure of construction sites and lockdown measures will clearly have an even more severe impact on business activity in the coming months.

“Survey respondents widely commented on doubts about the feasibility of continuing with existing projects as well as starting new work.

“Construction supply chains instead are set to largely focus on the provision of essential activities such as infrastructure maintenance, safety-critical remedial work and support for public services in the weeks ahead.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply: “The battered construction sector was offered a brief respite in February with a marginal rise in output after a difficult year, but any hope of a continuation of growth was mercilessly bulldozed away in March and construction companies registered their lowest levels of optimism since October 2008.

“As measures to contain the coronavirus COVID-19 pandemic were put in place across the UK, construction sites closed and builders lost their jobs on a frightening scale as overall activity fell to an extent not seen since April 2009.

“New orders were reduced to a trickle as the scale of the disease dawned on clients and lockdown severely hindered any further progress.

“With no upturn in sight, and with the fastest level of layoffs since September 2010, the sector is stuck in quicksand and sinking further.

“Though lower commodity prices will bring some relief for those that can source a limited number of materials amidst disrupted supply chains, this will be cold comfort without sites to work in and staff available as health concerns remain.

“The brutality of this impact cannot be underestimated, and the sector has not hit rock bottom yet.”

Latest news

Fit-out firm fined £1.1m after ladder fall

Engineer needs transfusion after massive blood loss caused by fall injury
44 mins ago

SIG management blunders rack-up £112.7m loss

New boss promises growth strategy after PwC called in to investigate divisional forecasts
7 hours ago

Union calls for construction workers to wear masks

Unite demands revisions to Construction Leadership Council guidelines
1 day ago

Robertson approved to start major Blackpool hotel

Site clearance to start next week on phase 2 of £100m Talbot Gateway regeneration
6 hours ago

Failed NHS Nightingale joinery firm sold in pre-pack deal

J&P Carpentry and Joinery went into administration after working on Birmingham NEC hospital
1 day ago

Steel erection starts on first HS2 bridges

Cleveland Bridge starts erecting 65m bridge to span M42
6 hours ago

Scotland’s builders begin return to work preparations

Firms hope to be cleared to return to work from mid-June
7 hours ago

£61m infra loan to pave way for 6,500-home scheme

Local contractors to sign first deals this summer to transform Cambridgeshire site
7 hours ago

Keep the industry updated by joining the Enquirer Directory

Membership lets construction know you are open for business now or in the future
2 years ago

Vistry asks subcontractors to cut rates

House builder warns trade packages could be retendered
1 day ago

TClarke rides out lockdown and eyes £2m half-year profit

M&E boss says swift cost savings helped firm breakeven in April and May
1 day ago

Kier confirmed for £97m Heartlands Hospital job

Work to start this summer on Ambulatory Care and Diagnostics Centre
1 day ago

Costain completes £100m fund raise

Dubai contractor takes 15% stake in Costain
1 day ago

Tycoon’s £1bn flats scheme consent quashed in Whitehall U-turn

Housing secretary accused of bias in backing Richard Desmond's 1,500-flat Isle of Dogs scheme
2 days ago

First pictures of giant HS2 tunnelling machines

TBMs being manufactured in Germany before launch on site later this year
1 day ago

M&E contractors hoping to ‘hold on’ through covid crisis

Engineering services leaders urge whole supply chain to work together to survive
1 day ago

Griffiths to start £25m historic Welsh viaduct upgrade

Restoration work to start next month on 150-year-old wooden viaduct
1 day ago

Barratt subcontractor rate cut letters “sent in error”

Specialists assured that 15% rate reductions are "not company policy"
2 days ago

NHS Nightingale joinery firm goes under

J & P Carpentry and Joinery collapses weeks after fast-track NEC conversion
2 days ago

EDF seeks consent for £18bn Sizewell C nuclear plant

Project will employ 25,000 construction workers, delivering a big post-covid 19 stimulus
2 days ago

Covid-19 compliance officers keep Ballymore sites safe

Contractors can draft in virus-protection help from new specialist supplier
2 days ago

ISG secures £17m Dudley leisure centre

Work to start on delayed Flood Street area leisure centre and swimming pool
2 days ago

Construction output to plunge 25% this year

Despite a strong rebound 2021 forecast to be down 6% from last year
3 days ago

£1bn building safety cladding fund open to applicants

Residential building owners can apply for funding for remedial work on non-ACM cladding systems
3 days ago

Roads contractors told to halve accident rates

Highways England aims to build on improved site safety performance seen during covid-19
3 days ago

Keepmoat to restart work on sites across England

House builder employs 1,150 staff and supports 10,000 supply chain jobs
3 days ago

A66 TransPennine £1bn upgrade route picked

Amey/Arup JV wins £45m design contract
6 days ago

Plan in for station on £40m revived Birmingham rail line

Plan lodged for new Moseley station on Camp Hill railway re-opening project
3 days ago

Highways firm trials social distancing tags on sites

Lightweight system can be clipped on belts, lanyards or hard hats
3 days ago

Ferrovial drops Agroman name

Ferrovial Construction become major project brand
3 days ago

Contractor services