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Construction Industry Continues To Recover From COVID-19

Construction Industry Continues To Recover From COVID-19
14 September 2020
 

Figures published by the Office for National Statistics show that monthly construction output grew by 17.6 per cent in July 2020.

This follows the record monthly growth of 23.5 per cent in June 2020. The level of construction output in July 2020 was 11.6 per cent below the February 2020 level.

Construction output in total fell by 10.6 per cent in the three months to July 2020, compared with the previous three-month period.  The Office for National Statistics (ONS) states that this was driven by falls in both new work (9.7 per cent) and repair and maintenance (12.4 per cent).

 

"The Prime Minister may want the industry to ‘build, build, build’ but that’s difficult when many investors are saying ‘wait, wait, wait’ and holding off embarking on new developments until there’s greater clarity.”

–Clive Docwra

Managing Director, McBains

 

Infrastructure sector graph

Picture: A graph showing components of new work and index volume measure in Great Britain during February 2020 to July 2020. Image Credit: Office for National Statistics

As shown in the above figure, infrastructure is the first sector where the level of output has surpassed the pre-coronavirus pandemic level in February 2020. 

The 17.6 per cent (£602 million) growth in repair and maintenance in July 2020 was because of increases in all repair and maintenance sectors. Private housing repair and maintenance grew by 24.6 per cent (£265 million) and non-housing repair and maintenance grew by 11.2 per cent (£219 million).

 

Industry Reaction – “Construction is Still a Long Way From Being out of the Woods”

 

Commenting on the new construction output figure, Clive Docwra, Managing Director of construction consulting and design agency McBains, commented:

“Today’s figures will be welcomed by the construction sector as a sign of its continuing recovery, but in reality they need to be viewed in the context of an industry that experienced a record 40 per cent drop in output at the height of the lockdown.

“Construction is still a long way from being out of the woods and the upturn is extremely fragile, reflected by the fact the figures show that new work decreased by 9.7 per cent in the three months to July 2020, with private new housing work alone falling by 17.0 per cent.

“The big concern for the industry is if there’s a second spike and a further lockdown. The government needs to do all it can to ensure the sector maintains its recovery.

“On top of this, of course, a potential no deal at the end of the Brexit transition period is making investors nervous about committing to new projects.  The Prime Minister may want the industry to ‘build, build, build’ but that’s difficult when many investors are saying ‘wait, wait, wait’ and holding off embarking on new developments until there’s greater clarity.”

Picture: A photograph of three people in high-vis waistcoats and hard hats looking at building plans on a large piece of paper

Article written by Ella Tansley | Published 14 September 2020

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