TheImpactofCOVID-19 on construction

The Impact of COVID-19 on construction

COVID-19 has had an enormous impact on employment, productivity and health and safety 1 2

Figure 2.1: Impact of COVID-19 on Construction (CLC)

The Office ofNational statistics reported construction activity fell by 2.6% in Q1 2020, and by 5.9% in March.

HIS Markit/CIPS UK Construction PMI registered 8.2% in April, compared with 39.9 in March.

Constructionline reported that of a survey of 4,500 firms in April, 47% had reduced their activity by 80% or more.

The Construction Products

Association estimates that construction output will fall by 25% in 2020, with the largest falls in activity in private housing (-42%), commercial construction (-36%), and private repair maintenance & improvement (-35%).

The Federation ofMaster Builders

reported 68% of builders had stopped 91% of projects in April.

The Builder’s Merchants Federation

reported a decline of 6.7% in sales between Q4 2019, and Q1 2020. Timber and joinery products declined by 11.1%, and plumbing, heating, and electrical products by 7.4%.

The economic effects are summarised in the CLC Plan: A circa 25% drop in construction activity was experienced up to the end of May.

This drop in activity has impacted employment in the sector.

Construction has the largest share of firms to have furloughed staff out of all sectors, with 48% of firms. The sector had the third highest share of its workforce furloughed, at 40.5%. Only the arts and entertainment and accommodation and food services sectors have furloughed a greater percentage. (Building Magazine).

Health & Safety

The Nuffield Trust report that unskilled construction workers are at a higher risk of death from Coronavirus than any other group. Construction has a higher rate of Coronavirus deaths than most other sectors, the Office of National Statistics shows. Low-skilled construction workers had a death rate of 25.9 deaths per 100,000 males, or 22 deaths, making it one of the most affected professions.

Figure 2.2: COVID-19 Deaths by Occupation (Nuffield Health)

Construction workers face risks not just on site, but in getting to work. Whilst the Government has advised against the use of public transport, Transport for London have reported high proportions of travellers being construction workers. To mitigate these risks DHF recommend a 5 point plan in: “Guidance for managing on site working during the COVID-19 outbreak”

Figure 2.3: “Guidance for managing on site working during the COVID-19 outbreak” (DFH)

Productivity

As reported by Build UK, these delivery risks undermine project viability. Build UK also note a drop of productivity, at circa 78%, potentially affecting cost and program.

As Mace note in their report “COVID-19: Returning to full productivity “, even before the coronavirus pandemic took hold, UK construction faced a huge challenge around productivity. Compared to construction workers in Germany, each UK operative on site produced 20% less per week which in turn had huge impacts on the affordability of delivering infrastructure and construction.

In “Methodology for quantifying the benefits of off-site construction” Tercia Jansen van Vuuren, Professor Campbell Middleton University of Cambridge. CIRIA, report buildings with high Premanufactured Value (PMV) at higher productivity than those with low PMV.

In a survey, one contractor calculated the average turnover per person per week was 60% higher than the corresponding average turnover for low PMV projects. Et parisciis aut faccusa

Delivery Risk

Ore pre exerum Accatemolupta necepedit quas a conseque et lis etus. Quianis Short term impacts have been extreme, with some projects being entirely stopped whilst some have continued to operate under controlled conditions. dolorio restrum quid est aut aute ped RICS report 69% project delays, 47% of construction sites closed and 29% of projects cancelled as of 27th May. eum ad quaspient. Esedictem eum repere apissimus andam nihicias ma quas Analysts at Barbour ABI calculate that the unprecedented large-scale stalling of projects and closure of sites had already affected £25.55bn worth of projects up to the end of May. doluptas aliat. The figure includes projects both started and at pre-contract stage, and includes construction costs alone rather than development and land costs.

Supply chains were disrupted in May, with increasing lead times for construction products and materials. A lack of capacity for deliveries and ongoing business closures resulted in the need to source alternative suppliers, which also pushed up costs. (The Construction Index, June 2020)

Redrow closed its sites due to problems in its supply chain. The housebuilder said in a statement “When there is a return to normality in the supply chain, and we are satisfied it is safe for our workforce to return to work, we will reopen sites and recommence production with an initial focus on fulfilling our substantial order book that stands at £1.4bn of which £0.9bn is contracted.”