The Office for National Statistics has revealed that output dropped
by 18.2% in the three months from February to April, compared to the three
months before, driven by a 28.3% drop in private housing and a 19.6% fall in
private commercial work.
The month-on-month decline of 40.1% in April followed a 5.9%
drop in March. The April drop – the largest fall out of all the main sectors of
the economy - was driven by declines in all types of work, with the biggest
contribution coming from private housing, which fell by 59.2%.
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Commenting on the figures Fraser Johns, finance director of contractor
Beard, said: “Recovering from this sort of setback will be no simple matter.
“The clear steer from government that the construction
sector should get back to work, coupled with the strong guidance from the
Construction Leadership Council in terms of how to achieve that safely, means
that the industry is in a good position to recover quickly. Recent PMI data has
suggested that this is already beginning to happen.
“Beard has been able to keep more than 90% of sites
operational throughout the crisis, and now has 100% up and running. One recent
report has indicated that 97% of sites industry-wide are now operational again.
This is hugely encouraging.
“As firms adapt to the new circumstances in which we all
find ourselves operating, we now need to continue to find ways of delivering
more efficiently. The crisis gives us all an opportunity to improve ways of
working and modernise outdated practices, so that ultimately the industry may
emerge stronger from the crisis.”
Clive Docwra, managing director of consulting and design agency McBains, added: “Today’s figures are further confirmation that the construction sector will face a hugely tough time to recover from the coronavirus pandemic.
“Particular concerns are private new housing work seeing a
third consecutive month of large decline, exacerbated by the Covid-19 lockdown
on April and now at its lowest level for a decade – bad news for the industry
but also for prospective homeowners given the housing shortage. The record
fall in private commercial new work also reflects the pause button being pressed
on major projects.
“Hopefully today’s figures will represent the nadir given
they cover the full month of lockdown, but while many large construction firms
are now resuming work, many will still weakened by reduced order pipelines over
the next few months.
“Firms are also experiencing labour shortages, supply chains
are still operating extremely slowly and cashflow is becoming an increasingly
pressing issue as cash reserves dry up. The government needs to
stimulate demand, for example through reducing VAT on repair and maintenance
work.”
