Construction at 40% of Pre-Pandemic Levels but Rallying in May

CONSTRUCTION OUTPUT in May grew by a record 8.2% overall following the record decline of 40.2% in April 2020.

However, the level of construction output is now down 38.8% on February 2020 before the impact of the coronavirus (COVID-19) pandemic.

For the quarter, construction output fell by a record 29.8% in the three months to May 2020, compared with the previous three months. The contraction was driven by record falls of 30.3% in new work and 28.9% in repair and maintenance.

The drop by a third in new work in the three months to May was caused by record falls in most of the new work sectors; private new housing and private commercial saw the largest decreases, falling by 42.5% and 29.5% respectively.

The decrease in repair and maintenance (28.9%) in the three months to May 2020 was because of record falls in all repair and maintenance sectors; the largest contributor was private housing repair and maintenance, which fell by 39.8%.

All new work accounts for approximately two-thirds of all work, while repair and maintenance accounts for approximately one-third of all work.

The Office for National Statistics (ONS) points out that the limited increase in May’s construction activity is not equal across all construction sectors and all UK regions.

Overall, every type of work, apart from infrastructure, has seen a record decrease in the three months to May 2020. Infrastructure fell 13.2% (£747 million) but was not a record.

Both new work, and repair and maintenance contributed to the large fall in output in the three months to May 2020.

New work fell by a record 30.3% (£8,217 million) in the three months to May 2020, again driven by record falls in every new work sector, apart from infrastructure.

While new housing saw record monthly increases of private work (21.4%) and public work (42.1%) in May, both have decreased in the larger comparisons with the previous three months, or May 2019.

Historic downturn

Clive Docwra, Managing Director of construction consulting and design agency McBains, said:

Clive Docwra, Managing Director of McBains.

“After two successive months of record falls in output, the construction sector was bracing itself for more bad news – and today’s figures reflect just how much of a historic downturn the industry is experiencing.

“In particular, record decreases of more than 40% in new housing work and almost 30% in commercial work over the three months to May highlight how essential it is that the government does all it can to get construction moving again.  

“Although May saw a rebound as construction started to return to work, this is all relative, with output 38.8% lower compared with February before the pandemic hit.  It will take several months for the sector to truly recover.”

Ongoing struggle for small builders strengthens case for targeted recovery, says FMB

Jessica Levy, Director of Communications at the Federation of Master Builders (FMB) said:

Jessica Levy Director of Communications at the Federation of Master Builders

“Despite a healthy rebound in May driven mainly by new house building activity, construction output remains at historic lows, and the quarterly and annual trends paint a bleak picture.

“We need to both act now to reverse the huge falls resulting from the recent shock of the pandemic – especially in the domestic repair and maintenance sector – as well as focus on building back better.

“The construction sector welcomed short-term boosts like the Green Homes Grants and the £1,000 bonus to take on new trainees in construction. But we also need the Government to back a longer-term vision to sustain the much-needed recovery. This should include a temporary and targeted cut in VAT, a national retrofit strategy, and support to carefully match new recruits to the right construction firms.”