Construction output to plunge 25% this year

Aaron Morby 4 years ago
Share

Construction output is expected to fall by 25% this year before rebounding in 2021 in a best-case forecast from economists.

According to the Construction Products Association, the industry will recover strongly in 2021 but still finish up 6% lower than last year because of the severity of the impact of the coronavirus epidemic.

This is the most optimistic of three scenarios based on a ‘V’-shaped recession affecting primarily the second half of March, April and May, followed by a recovery from June at a slower pace than the initial decline.

In a second wave of infection and lockdown scenario – a W-shaped recession – the fall in output is forecast to be over 31% this year, with 2021 coming in 16% lower than 2019.

The third most damaging long recovery scenario or U-shaped recession based on continued restrictions throughout 2020 and a slow recovery in 2021, warns of a 31% plunge followed by total output next year almost a fifth lower than 2019.

Best case recovery scenario


  • Construction output falls 25% in 2020
  • Construction output in 2021 anticipated to be 6% lower than in 2019 in spite of recovery
  • Private housing output falls 42% in 2020
  • Commercial output is anticipated to fall 36% in 2020
  • Private housing repair, maintenance and improvement falls 35% in 2020
  • Infrastructure work is forecast to fall by 9% in 2020 before growth of 40% in 2021

The CPA’s Economics Director, Noble Francis, said: “The greatest impacts of the lockdown in construction were seen in the private housing sector.

“Returns to site in May will focus on partially completed developments rather than new starts as house builders are expected to be very cautious given uncertainty regarding demand.

“This uncertainty will also keep the recovery muted in commercial offices, industrial factories and the most-severely affected sub-sector, commercial retail.”

He added: “A more positive outlook is expected for infrastructure activity thanks to a greater ability to implement safe distancing for workers on larger sites but also, vitally, thanks to HS2 being given the go ahead to proceed.

“An increase in activity from the five-year investment programmes within regulated sectors such as water and sewerage, roads and rail also adds to this more positive story.”

But Francis also warned: “In addition to these issues around the general economy and construction demand, productivity on site has fallen significantly due to social distancing and other safety, which means that construction activity will take longer and cost more.

“Even in our most optimistic scenario, construction output bounces back by 25.5% in 2021 but, with growth starting from a low base, output will still be 6% lower than in 2019.

“Combined with the high levels of uncertainty on demand, getting levels of construction back to pre-Coronavirus levels will take time. Expect a long slog ahead.”

Latest news

Carpenter killed by falling timber frame panels

Court fines specialist contractor £8,000 after site tragedy
3 days ago

Road sweeper specialist files administration notice

Go Plant lodges court notice
3 days ago

Anglian Homes rides in to finish crashed Everest contracts

Rival doubled glazed window specialist commits to complete orders
3 days ago

Final work starts to connect super sewer to London system

End in sight with 1.5m thick concrete wall to be demolished to link-up to Lee Tunnel sewer system
3 days ago

Legal challenge launched against £1.5bn A66 dualling

Balfour Beatty, Kier and Keltbray must now await outcome of court challenge
3 days ago

John F Hunt wins 24-storey Battersea tower

Specialist to carry-out demolition, enabling works and RC frame construction
4 days ago

William Hare wins steelwork on £500m Broadgate towers

Specialist to work on 2 Finsbury Avenue with McAlpine
4 days ago

McAlpine appoints MD to grow ventures business

Owain Thomas will build on private rental and healthcare development successes
4 days ago

BAM Co-op Live Arena opening delayed yet again

Another gig cancelled last night amid last minute safety concerns
4 days ago

National Grid unveils winners for £9bn network upgrade

New 'enterprise model' to deliver infrastructure schemes quicker and cheaper
5 days ago

Turkish insulation panel maker to build £45m UK factory

Assan Panel to open first UK plant at Freeport East
4 days ago

Expanding consultant Stantec swoops for Hydrock

Stantec UK business expands by a third as 950 staff join from Bristol-based engineer
5 days ago

Contractors wanted for £800m highways deal

Bids invited for Eastern Highways Alliance Framework 4
4 days ago

Galliford Try names group head of infrastructure

David Lowery promoted to Divisional Managing Director – Infrastructure.
4 days ago

Chigwell Group looks at stock market listing

Essex contractor registers as Public Limited Company
5 days ago

A57 Mottram Bypass clears final legal challenge

Balfour Beatty to get go-ahead to start shortly
5 days ago

100 jobs axed as Geoffrey Osborne confirms administration

Chairman Andrew Osborne calls it a 'sad day' as board loses fight for survival
6 days ago

Midgard set for Notting Hill office tower overhaul

Landmark project edges towards final approval after 10-year planning saga
5 days ago

Cumbrian civils firm clinches £40m Sellafield contract

Civils specialist Stobbarts will support McAlpine on groundworks and concrete
5 days ago

Designers named for London 2000-bed student rooms job

Bouygues will build £400m London School of Economics student scheme next to Tate Modern
5 days ago

£117m-turnover contractor files administration notice

ARJ Construction lodges court notice
6 days ago

£1bn London Blackfriars tower blocks approved

Trio of buildings rising to 45, 40 and 22 storeys approved by Southwark Council
6 days ago

Council decides to end Balfour deal after 13 years

Contractor has been maintaining roads across Herefordshire since 2013
6 days ago

Six civils clients to switch to low carbon concrete and steel

National Highways, Northumbrian Water and Sellafield sign fresh decarbonising pledge
7 days ago

Fortem extends homes repair deal across Birmingham

Willmott Dixon owned firm adds another two years to deal worth £170m
6 days ago

Kier wins £118m civil service Darlington hub

Work is expected to start towards the end of this year
1 week ago

Green light for 34-storey Digbeth apartments tower

480 flats will be delivered for Clarion housing association
6 days ago

LHC starts race for major retrofit and decarb framework

Hunt starts for firms to help with 6.1m social homes upgrade target
1 week ago

Windows giant Everest crashes into administration

Around 350 jobs at risk while hunt starts for a buyer to salvage business
1 week ago

Green light for £500m Newcastle health complex

Mixed use scheme will promote healthy living across all stages of life
1 week ago

Contractor services