POST Online Media Lite Edition


Construction work declines in UK

Christian Fernsby |
March data pointed to the fastest downturn in UK construction output for almost eleven years as emergency public health measures to halt the spread of coronavirus led to stoppages of work on site and a slump in new orders.

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The headline seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index dropped to 39.3 in March from 52.6 in February, to signal the steepest fall in construction output since April 2009.

Survey respondents overwhelmingly attributed reduced activity to the impact of the coronavirus pandemic.

All three broad categories of construction work recorded a fall in output during March.

Civil engineering activity (index at 34.4) saw the steepest rate of decline, followed closely by commercial building work (index at 35.7).

Residential activity dropped at a comparatively modest pace in March, with the equivalent index posting 46.6.

However, construction companies often commented on an expected slump in house building from stoppages on site amid increasing measures to slow the spread of COVID-19.

New work received by construction companies fell at a sharp rate in March, with the downturn in order books the fastest recorded by the survey since August 2019.

Survey respondents commented on a combination of weaker demand and concerns among clients about the feasibility of starting new projects during the COVID-19 outbreak.

Lower workloads and business closures resulted in a marked reduction in staffing numbers across the construction sector during March.

The latest survey indicated the steepest pace of job shedding since September 2010.

Construction companies recorded intense supply chain pressures in March as the COVID-19 pandemic resulted in reduced capacity and shortages of stock among vendors.

The latest lengthening of lead-times among vendors was the steepest recorded since October 2014.

Input buying dropped at the fastest rate for six months.

Average cost burdens continued to rise in March, although the rate of inflation moderated since the previous survey period amid softer demand conditions and lower commodity prices.

Meanwhile, latest data indicated a slump in business expectations across the UK construction sector.

Survey respondents are more pessimistic about the year ahead outlook than at any time since October 2008, which was almost exclusively attributed to the economic impact of the COVID-19 pandemic.

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