Britain’s construction industry recorded its worst slump in more than two decades last month, as many builders shut down their sites during the Covid-19 pandemic.
The monthly IHS Markit/Cips snapshot showed the main construction activity index fell from 39.3 in March to 8.2 in April, the lowest since the figures were first collected in April 1997, and lower than the previous record low of 27.8 in February 2009 at the height of the financial crisis.
More than four-fifths of firms surveyed (86%) reported a drop in business activity since March, while only 3% reported an increase. Residential and commercial construction sectors were the hardest hit, but civil engineering also declined at a record pace.
The closure of builders’ merchants and manufacturing stoppages led to widespread shortages of materials. About three-quarters of construction companies reported longer delivery times from suppliers, and also highlighted a lack of safety equipment such as face masks and goggles for their workers.
New business volumes in the sector fell at the fastest rate on record. Staffing levels also fell sharply in April, with companies furloughing staff until work on site can resume with physical distancing measures in place.
Tim Moore, economics director at IHS Markit, said: “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.”
Duncan Brock, of the Chartered Institute of Procurement & Supply (Cips), said it could take the construction industry many years to recover. “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.”
House sales in the UK have virtually ground to a halt since lockdown measures were introduced in the last week of March. This has prompted the Office for National Statistics to temporarily suspend its UK house price index. It said the lockdown was “expected to greatly reduce the amount of housing transactions” in April, making it very difficult to produce a national measure of house prices.
A number of major housebuilders and construction firms have started to reopen their sites in the past fortnight, including Mace, Taylor Wimpey, Vistry – formerly known as Bovis Homes - and Persimmon.
While companies such as Taylor Wimpey have drawn up a Covid-19 code of conduct, many construction workers have complained on social media of unsafe working conditions. They say the 2-metre physical distancing rule is almost impossible to adhere to on crowded building sites and in work canteens.
