Buyers report “historic” construction collapse

Grant Prior 4 years ago
Share

The Covid-19 crisis saw a drop in construction output in April of “historic proportions”.

The bellwether IHS Markit/CIPS UK Construction Total Activity Index saw buyers reporting the fastest decline in UK construction output since the survey began 23 years ago.

The index plummeted to 8.2 in April from 39.3 in March. Any reading below the 50 no-change mark represents a contraction in output. The previous record low was 27.8 in February 2009.

Tim Moore, Economics Director at IHS Markit, which compiles the survey said: “The rapid plunge in UK construction output during April stands out even in a month of record low PMI data for the manufacturing and service sectors.

“A drop in construction activity of historic proportions in April looks set to be followed by a gradual reopening of sites in the coming weeks, subject to strict reviews of safety measures.

“However, the prospect of severe disruption across the supply chain will continue over the longer-term and widespread use of the government job retention scheme has been needed to cushion the impact on employment.

“Looking ahead, construction companies widely commented on worries about cash flow, rising operating costs and severely reduced productivity, as well as a slump in demand for new construction projects.”

All three main categories of construction work experienced a survey-record fall during April, with declines in house building (7.3) and commercial activity (7.7) exceeding that for civil engineering (14.6).

Business expectations for the year ahead dropped slightly since March and equalled the survey-record low seen in October 2008.

Construction firms widely noted concerns beyond simply reopening sites, including cash flow difficulties across the supply chain, rising costs and severely reduced productivity.

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply said: “Only a few civil engineering and infrastructure projects were able to continue in April, but a tentative restart is expected in other areas such as house building and commercial construction in the short-term.

“As new plans from policymakers are developed over social distancing, building work may continue but not as we know it as restrictions and new safety rules are likely to make progress more difficult.

“For a sector still not fully recovered from the skills shortages created by the financial crisis in 2008, the vacuum of output created by the pandemic has knocked the sector back another decade.”

Latest news

Osborne staff start looking for new jobs

"Open to Work" flags appear on LinkedIn profiles
5 hours ago

Plan rejected for 42-storey tower above historic building

Councillor describes as ludicrous plan to build 300 flats above Georgian mansion
6 hours ago

Ventilation deal could hike product prices for contractors

Watchdogs at CMA launch probe after duct firm acquires rival
6 hours ago

Tide gets go-ahead for London 412 student flats scheme

Volumetric developer secures planning for West Ealing project
6 hours ago

Green light for £75m Friar Gate Goods Yard in Derby

Construction set to start this summer on revamp of historic buildings
6 hours ago

Robertson to deliver £45m Newcastle NHS Trust works

Capital works will be focused on Freeman Hospital and the Royal Victoria Infirmary sites
5 hours ago

Winners named for £2bn Healthy Homes framework

CHIC reveals line-up of over 40 firms for net zero and building safety works
6 hours ago

Plan lodged for tallest skyscraper outside London

Developer Salboy submits plan for 76-storey Manchester resi tower
1 day ago

Curo starts £170m race for new homes framework

Bath housing association plans to build up to 300 homes a year
1 day ago

Gove approves major Cambridge North mixed-use scheme

Government backs controversial scheme of 424 flats and 600,000 sq ft of tech and lab space
1 day ago

Pontins holiday park to house Sizewell C builders

Suffolk holiday park to house 500 nuclear construction workers
1 day ago

Adrian Bloor targets 1,000 homes-a-year

Expansion plans after major investment into challenger house building business HarperCrewe
1 day ago

Housing firm fined £528,000 after cable strike

Maintenance workers given no information on underground services
1 day ago

Berkeley subbies face six weeks without payments

Introduction of new finance software means payment hiatus for suppliers
2 days ago

Pagabo reveals 56 winners of latest £1.6bn retrofit deal

Decarbonisation Solutions Framework launched: Full list of winners
2 days ago

Go-ahead for £100m Liverpool Love Lane flats

500-flat scheme will be built across four blocks in Vauxhall area of city
2 days ago

Unions win HS2 site access battle at Old Oak Common job

Skanska, Costain, Strabag JV now the last denying unions access to HS2 sites
2 days ago

Contractors jack 1,100t viaduct into place in 13-hour operation

158m-long composite deck structure jacked into place 10-hours ahead of schedule
2 days ago

Wates wins former Daily Mail printworks transformation

British Land advances major cultural venue at London’s Canada Water
3 days ago

Mace poaches Ramboll chief to be Head of Engineering

Martin Feakes will develop civil and structural engineering offer at Mace
3 days ago

Subcontractors form alliance for major civils jobs

Trio of specialists join forces to collaborate and offer Tier 1 contractors a turnkey solution
3 days ago

Fear of supply chain failures boosting collaboration

Procurement survey also reveals project bank account use is rising
3 days ago

Wates sets up business to target 160,000 mouldy social homes

Healthy Homes service will be offered to social landlords across England
3 days ago

Higgins wins £75m Peabody Passive House job

Latest phase of Deptford Landings to start construction
3 days ago

Contractors and unions agree Sizewell C working deal

New deal offers improved sick pay and parental leave over Hinkley Point deal
4 days ago

Competition chiefs win legal fight for more construction raids

High Court rules CMA officials can raid a domestic property as part of investigation
4 days ago

More Osborne companies file administration notices

Three more divisions lodge notices with court
4 days ago

McLaren wins multi-storey urban logistics contract

South London win with British Land is pioneering urban logistics hub
4 days ago

Big social housing schemes at risk over funding uncertainty

Housing associations warn uncertainty over public funding beyond 2026 is curbing new schemes
4 days ago

Kier wins Worcestershire town centre renewal

Firm secures Bromsgrove commercial and cultural hub project
4 days ago

Contractor services