Stephen Keye

June 21, 2020

Posted by FM & Construction

How bad is the impact of COVID-19 to the Construction Industry???

Since June 2016 the no 1 topic for the majority of the nation was BREXIT. From the MP's in Parliament to the wannabe MP's in the local pubs and beyond, not a day went by where discussions about BREXIT could not be heard. Fast forward to the end of 2019, a General Election was held (and whoever you voted for) it felt like we were finally getting somewhere and 2020 was going to be the year of prosperity.

We should be so lucky, I hear you say. Only a matter of months into 2020 a new topic was at the forefront of the nations thoughts/discussion and this was the Coronavirus or COVID -19 (the slightly more technical term for it). 

Without boring you with all the details about COVID-19, (as we all know them anyway), the country came to a halt as of March 23rd and ever since we've been operating under all sorts of restrictions. 

Bit by bit the government has started to reopen the country in an attempt to fire up the economy, including the construction industry, which in some respect has never stopped. 

Over the last few weeks and days there have been some positive and concerning reports about the construction industry. Only recently it has been reported that April's output dropped to a record low of 40.1% and the construction industry has claimed a total of £4.6bn through the furlough scheme. 

There has been further news of companies revenue forecast being cut, profits being down and business reporting zero Turn Over for April with a slow but further decline for May. It all sounds a bit doom and gloom doesn't it? And I haven't even mentioned redundancies. 

However, do these reports come as a surprise to anyone? With the pause button being pressed in March, the reports for April and May were never going to be rosy. 

The focus for the industry now has to be the recovery but how long will that take? Depending on who your speak to the timescales are different. Some say 6 months, some say 12 months, others predict it could be 2 years or even longer.

With the construction industry contributing over 7% of the GDP to the UK economy the government will have no choice but to find ways to make sure the construction sector is firing on all cylinders sooner rather than later.

We've already seen around 85% of sites reopen and other initiatives like reverse VAT charges delayed until next year, not to name some of the massive on going projects like HS2 and the Commonwealth Games. Locally communities should also see regeneration work continuing or kicking off as well. 

Of course there is more that can be done to help. Employers, contractors and supply chains need to understand the difficulties caused by COVID 19 and work together to overcome them. Quicker and improved tendering process need to be signed off or calling a mini Budget might help (not that the Chancellor hasn't already got enough to deal with).

This could also be an opportunity to review the training for apprentices, introduce Talent Retention Schemes to avoid losing skilled staff to other industries and digitalisation fast tracked with 3D construction printing business becoming more apparent.

Anyway that's enough from me for now, the topic is so huge I could go on for hours and hours. I hope you enjoyed reading my blog and would love to hear your thoughts on the impact COVID-19 is having on the construction industry... Maybe you have some information you'd like to share and discuss? Would be great to hear from you.

Stephen Keye

FMC - Senior Consultant