Construction workloads at their lowest level in seven years

According to the RICS Q1 2020 UK Construction and Infrastructure Market Survey, most respondents envisage a fall in workloads, new hiring and profit margins in the coming year.

Only three per cent of respondents reported a rise in activity in the first quarter of the year, down from 17 per cent in Q4 2019.

Before stricter lockdown measures were imposed on March 26, responses still indicated a broadly resilient picture for the sector. After this date, responses signalled a sharp downturn in workloads.

Simon Rubinsohn, RICS chief economist, said: “It is hardly a surprise that sentiment in the construction sector fell particularly sharply following the imposition of the lockdown.

“More ominously, the forward looking metrics have also softened materially, suggesting that it will not simply be a case of returning to where the industry was prior to the onset of Covid-19 as the government begins to ease the lockdown.

“Partly this reflects uncertainty about the likely state of the economy at this point and how this will impact on development, but it is also indicative of the challenge the sector is currently under.”

Hew Edgar, head of government relations, added: “The supporting measures that the Government introduced in the immediacy for the built environment – covering pay, rent, and business operating costs to name a few – were welcome, but it has become apparent that there are gaps that need addressing; not least parity in approach across the UK.

“The UK Government must start exploring how the sector could taper the reopening of non-essential construction sites within stringent parameters of health and safety adherence; introduce grants; and review how repair and maintenance work could proceed whilst public buildings are not fully occupied. A combination of these will support professionals, the workforce, manufacturers and supply chains by providing a pipeline of work and vital cash flow in the short term.

“Fiscal stimulus is most effective once the construction starts on site; only then does finance start to flow down the supply chain. As such, the Government should explore how best to accelerate and enable the design, planning approval, and procurement of construction projects to ensure construction-ready schemes can start when the pandemic subsides.”