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

Bouygues/Murphy JV confirmed for £2.3bn Thames tunnel job

BMJV clinches 4.2km Lower Thames Crossing road tunnel job
19 hours ago

Roofing firm fined £881,000 after double fall

Court hears of two falls on sites involving same contractor
17 hours ago

Strabag tunnel drive in Yorkshire sets new world record

Woodsmith potash mine tunnelling project to be included in Guinness World Records
17 hours ago

McLaren and Arlington to develop York Central site

Developer deal signed for one of the UK’s largest city centre regeneration schemes
21 hours ago

Watkin Jones plans 36-storey Glasgow tower

The Ard student rooms scheme will be Glasgow's second tallest building
21 hours ago

Balfour Beatty on track for solid set of results

Country's largest contractor on course to meet financial targets
22 hours ago

Brymor Group Southern heads for CVA

Hampshire builder applies for Company Voluntary Arrangement with its creditors.
22 hours ago

Former Costain transport chief joins Aecom

Sue Kershaw takes up US-based vice president job with consultant
1 day ago

Industry’s best construction managers revealed

More than 80 now in the running for delayed awards: Full list
2 days ago

Materials prices plummet as housing demand slumps

Buyers report biggest fall in purchasing costs for 14 years
2 days ago

Welsh contractor Andrew Scott targets £90m turnover

Profit and revenue up at Port Talbot-based civils and building firm
2 days ago

M-AR buyer starts round of redundancies

30 jobs at risk after modular firm bought out of administration
2 days ago

First HS2 viaduct completes deck beam installation

EKFB completes beams for first of project's 50 major viaducts
2 days ago

Fatal accident at Laing O’Rourke Oxford site

Work suspended on site after tragedy
3 days ago

Homes lead the way as Bancon Group boosts turnover

Homes and contracting group looking to further growth in 2024
2 days ago

L&G Modular Homes scheme replaced by traditional build

Wolverhampton council chooses new partner and build method for £150m project
2 days ago

£33m Plymouth city centre homes scheme approved

Spring start for Bath Street scheme in Millbay regeneration area
2 days ago

Balfour renews £330m Lincolnshire highways deal

Firm will use its new operational control hub to promptly address network issues
3 days ago

Three Caledonian Modular-built schools to be demolished

DfE confirms Essex, Somerset and Northampton schools will be bulldozed and rebuilt
3 days ago

Gilbert-Ash takes £30m Tate Liverpool revamp

Work to start in the New Year on remodelling of iconic 1846 warehouse
3 days ago

HS2 Solihull mass transit enabling works out to bid

Bidding for £60m main works to start early next year
3 days ago

Modular health specialist Vanguard rescues M-AR

Deal with administrators sees Vanguard add production capacity with 100,00 sq ft offsite factory
3 days ago

Torsion forms JV to build £90m Leeds resi tower

Construction to start in January on one of Leeds' tallest towers
3 days ago

Approved change to concrete ‘recipe’ to slash carbon emissions

New approved concrete mixes will be able to blend finely ground limestone and fly ash
4 days ago

Network Rail unveils Cardiff South Central masterplan

Plans being drawn up for major housing-led mixed-use scheme
3 days ago

McLaren Living to revamp Watford police station site

Developer to submit plans for a major mixed-use development
4 days ago

National Grid £12.8bn HV civils framework hits market

Firms needed for major power line links and high voltage direct current converter stations
4 days ago

P.P O’Connor blows down four iconic cooling towers – video

Fiddlers Ferry Power Station regeneration gets off with a bang
4 days ago

Worker injured at £300m offshore wind factory site

Accident on major Teesside construction site
4 days ago

8Build bags Cambridge office and labs scheme

Firm wins phase 2 of The Press biotech development
4 days ago

Contractor services