Covid-19 Construction Industry Report
Covid-19 Construction Industry Report
Just as we thought we were over the hill with Covid-19, infection rates are rising, new lockdown measures are being introduced, and the light at the end of the tunnel doesn’t seem to be getting much brighter.
Two weeks ago we undertook our own survey asking you and thousands like you about your experiences and views.
Armed with that information we take a look at what impacts the events of the last 6 months have had on the construction industry and where and when we can expect the sector to pick up.
There’s no hiding or denying the direct impact the Covid-19 pandemic has had. Over 42,000 people have sadly lost their lives in the UK, over a million worldwide, and counting.
Worldwide, jobs have been lost at alarming rates. In the UK the economy declined by over 20% in Quarter 2, the deepest recession since records began. Unemployment currently stands at 4% but is predicted to rise to 9% with 16-24 years old worst affected.
74% of those surveyed experienced a significant negative impact on their business caused by the restrictions put in place to battle the virus, with over 60% using the Government furlough scheme to save jobs (slightly lower than national average of 70%).
The health sector in this country was stretched further than any can remember and some sectors, including hospitality, travel and entertainment, are on their knees.
So through all this pain and sacrifice, what if anything did we learn? What good could possibly have come from it?
We posted an article several months ago showing the environmental improvements and improved community cohesion that occurred over the spring months. The whole nation displayed a remarkable ability to adapt.
Homeworking turned bedrooms into offices, zoom replaced the board room the staff room and the pub. We clapped as-one for our carers, we spent more time with our loved ones and we recovered two hours of our day by avoiding the painful commute.
We were blessed with wonderful weather and as restrictions were partly lifted we began to visit parts of the country many of us had never seen and others had not seen since our childhood. As we basked in months of sunshine we started looking at life in a very different way.
70% of our respondents said that at the beginning of the pandemic, they placed most importance on the direct health impact of the virus.
However over recent months there has been a change in attitude, with over 65% of respondents’ now believing economic prosperity and growth should be the most important factors in the government’s future approach. This is partly fuelled by concern over a decline in care for other medical conditions, which have been neglected as resources were diverted to deal with Covid19.
In terms of economic recovery, a report published by Globe Newswire suggested that the global construction market is expected to decline by just under USD 1 billion in 2020. However, the industry will start recovering in late 2020 -2021 and reach a market size of USD 11,496.7 billion, growth 1.2% in the entire period (including the decline of 2020).
This growth is echoed by the latest HIS/CIPS PMI data which shows there has been a positive increase in activity within the construction market in the UK since September. With works in the commercial market increasing at the quickest pace in over two years.
The office of Budget Responsibility’s optimistic outlook is that unemployment will have returned to pre-crisis levels in 2022.
We are obviously some way from being out of the woods but there are other optimistic indictors. GDP is on its way up at over 18% and while it is still lower than pre-crisis levels, it is certainly on the right trajectory. The number of job vacancies advertised in August was 55% higher than in the two previous months.
82% of our respondents noted an increase in workload as restrictions were lifted over the spring and summer months, which many put down to pent up demand being unleashed. So do we expect this to continue?
The majority of those who took part in our survey believe that this depends on government policy. 74% of respondents feel we need to learn to live with the virus and avoid locking down to the levels seen 6 months ago.
Hindsight is a wonderful thing and there is consensus that the response to the pandemic should have been different.
Respondents felt that previous governments should have invested in systems and strategies to better manage a pandemic. This should have included isolation of the most vulnerable (The Guardian predicted in June that over half of Covid-19 related deaths will be residents of care homes) and intervention with PPE and social distancing measures at a much earlier stage. This they believe would not have affected the economy to the levels lockdown has done.
2020 has been a year to forget, whilst there is no denying the awful impacts the pandemic has had on both lives and livelihoods, the signs show we are moving in the right direction and 56% of respondents expect to be tendering more work next year, with both the public and private sector investing much more.
There are plenty of positives to take from what we’re seeing at the moment, we might not get the sharp economic bounce back we’d hoped for. And whilst we are not out of the woods just yet. For construction, we do believe the worst is behind us, just that the best has yet to come.
However, things can will get better (and they seem to heading that way already).