Construction Matters Autumn 2020

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Construction Matters DRIVING LIFELONG PROSPERITY

In the last six months, coronavirus has had a significant impact on the construction industry and how firms have been delivering projects. With the increasing challenge of social distancing and, at times, a lack of resource of materials, delivering construction contracts continues to be difficult as companies adapt to new onsite operations. Whilst some sites remained open during lockdown, many took the decision to close for a period of time and the impact of this is now beginning to filter through, with some finding it difficult to fund ongoing projects and taking the decision to reduce their cost base through

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reduced headcount or direct costs. For those who have now returned to site, it is apparent that the level of output is not as it was prior to the coronavirus pandemic due to new safety measures and, therefore, the impact on margin for contracts is beginning to show. The office for national statistics has released information for the construction industry which show how significant the impact of coronavirus has been on the sector. For the period April to June 2020, construction output reduced 35% compared with January to March 2020, the largest decline in quarterly growth since records began in 1997. This is compounded by the fact that January to March 2020 had already been severely impacted by adverse weather and, therefore, the first six months of this year have been

Autumn 2020

particularly difficult and challenging to plan for. Since lockdown has been relaxed there are some signs of the industry improving. Of those businesses that responded to the office for online statistics, 97.4% confirmed that they were still currently trading, with only a small percentage of businesses still either temporarily closed or paused trading. In quarterly data released for June and September 2020, there was monthly growth across all sectors, albeit all types of work are yet to recover to their February 2020 pre-pandemic level. Still, this is showing promising signs and something from which businesses can gain momentum. It is not just companies that have been impacted, with self-employed contractors also feeling the impact of lockdown and reduced working.


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