Construction remains upbeat despite record slump

The construction industry remains upbeat despite record falls in activity and is ready to adjust to a ‘new normal’ as the economy comes out of lockdown, according to the Chartered Institute of Building (CIOB). This month’s Construction Purchasing Managers Index (PMI) survey found steep declines in activity across the sector, although LinkedIn found that confidence among construction industry professionals is still stronger than most.

The latest IHS Markit’s Construction PMI has found that (86%) of survey respondents reported a reduction in business activity since March, reflecting widespread site closures and shutdowns across the supply chain in response to the public health emergency. Seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index fell from 39.3 in March to 8.2 in April, a downturn in overall construction output.

All three main categories of construction work experienced a survey-record fall during April, with declines in house building (7.3) and commercial activity (7.7) exceeding that for civil engineering (14.6). Lower volumes of construction output were almost exclusively attributed to business closures in April, with survey respondents often commenting on complete stoppages of activity on site due to the coronavirus (COVID-19) pandemic. April data also highlighted a severe impact on construction supply chains, with closures at builders’ merchants and stoppages of manufacturing production leading to widespread supply shortages.

Caroline Gumble, Chief Executive at the CIOB, commented:

“A key factor in our economic recovery is how the government supports industry. It is vital that government takes steps to ensure the construction industry remains strong during this uncertain time, and provides support for trained professionals to deliver current projects and develop a pipeline of work for the future.

Construction professionals clearly feel confident about their ability to get and keep a job, to improve their financial situation and advance in their careers, which shows that despite the output stagnation, the industry remains hopeful for the future.

But while we remain strongly supportive of getting the construction industry back to work, we must continue to follow government guidelines and find pragmatic ways to ensure the workforce and the general public are kept safe. We must also continue to work collaboratively within the industry, taking an approach to our partners and the supply chain which is focussed on communicating effectively and cooperating to pragmatically resolve any contractual issues that may come up between us.”