Construction output in the UK has declined at its fastest rate in over 23 years.
IHS Markit/CIPS UK Construction Purchasing Managers’ Index has plummeted to 8.2 in April from only 39.3 in March. Any number with an index rating over 50 represents a growing industry so such a low figure is a cause for concern. House building, in particular, has faced a huge decrease in output, falling to just 7.3 in the index.
The figure is the lowest since the index was started in 1997 and considerably lower than a previously record low figure of 27.8 recorded during the financial crisis in February 2009.
Even with the UK economy reopening next week, construction is likely to face a slow return to previous output levels as supply chains have been decimated with builders’ merchants and manufacturing production also suspended in recent months. Three-quarters of the surve panel had faced significantly longer delivery times in April.
Duncan Brock, Group Director at the CIPS, said:
“April’s figures delivered more worrying news for fragile construction businesses as the effects of the coronavirus continued to ripple across supply chains, devastating all productivity in its wake. Though a fall in output was not a complete surprise, the scale and suddenness of the drop has knocked the wind out of building work in the UK.
“More vulnerable than other sectors that make up the UK economy, construction was unable to continue in any significant capacity, as companies grappled with furloughed staff and building sites under complete shutdown.
“Only a few civil engineering and infrastructure projects were able to continue in April, but a tentative restart is expected in other areas such as house building and commercial construction in the short term. As new plans from policymakers are developed over social distancing, building work may continue but not as we know it as restrictions and new safety rules are likely to make progress more difficult.
“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.”
One Response
My son, a high level construction industry employee with qualification in supply chain management complains that he has to spend his time at home chasing materials which suppliers are reluctant to release
The Government needs to set priorities according to need and be seen to operate fair rationing if anarchy is to be avoided
We are all in this together. How long could snagging take and what will buyers’ expectations of their conveyancers be ?