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Coronavirus updates

COVID-19 Construction Update 27 March 2020

March 2020

Here is an overview of our first weekly briefing on the impacts of the COVID-19 pandemic on the construction industry.

Each week we will be providing:

• a summary of the developments in the UK economy,
• evidence of changes to activity and conditions in the construction industry, and
• insights drawn from our planning data.

Economic conditions

The Coronavirus pandemic is delivering the fastest and most severe economic shock in history, with the situation moving too fast for official data to keep up. Governments and central banks across the world have responded with the largest ever stimulus packages including The Bank of England, who have slashed the base rate to 0.1% and expanded its Quantitative Easing programme. With unemployment expected to significantly increase, consumer debt is also at risk of extremely high levels.

Construction industry

There is little or no official data on the impact of the pandemic on the construction industry yet. Activity appears to have been strong until this week with most site shutdowns and project delays starting to be announced. Builders’ merchants saw record sales last week, however that has dropped this week with many stores closing or switching their operating hours. Many manufacturers are also dramatically scaling back production over the coming weeks.

Evidence of changes to construction activity has been somewhat mixed:

• Most larger housebuilders have announced a suspension of all activity on sites.
• Contractors are taking a mixed approach by either suspending all activity, only undertaking critical work or taking a site-by-site approach.
• Major infrastructure projects have been stopped.
• Several public sector and infrastructure work are continuing.
• Highways England are continuing much of their planned activities.

Construction project information

Drawing firm conclusions at this early stage is difficult, but our researchers are endeavoring to provide accurate and timely updates to projects. To date 1,051 projects have been updated due to the effects of COVID-19.

Many COVID-19 related delays so far are in the residential sector, however this is spread relatively consistently throughout the UK. Among the other construction sectors, London has experienced the largest impact from Coronavirus-related delays. Other UK regions are, apart from a few regions in specific sectors, yet to see large-scale postponements.

Impact by planning stage

Planning updates from councils currently steady, although they are expected to drop in the coming weeks. Most projects identified as delayed are under construction with a smaller number at the contract award stage or in the earlier planning stages.

Next steps

We will continue to provide weekly updates regarding the current situation. For a more detailed review of the projects affected by COVID-19, please click here and get in touch.

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