The latest quarterly data from the Office for National Statistics (ONS) showed a 39.8% fall in private repair and maintenance in the three months to May 2020. These sharp effects of the coronavirus crisis on local builders also reflects the picture painted by the Federation Master Builder’s (FMBs) recent State of Trade survey.
Following the release of data, Moustafa Ali, Economist at GlobalData, a leading data and analytics company, offers his view: “The improvement in construction output in May reflects the restarting of operations for most firms in the sector and is in line with GlobalData’s expectations of a recovery following the severe disruption caused by COVID-19 containment measures.
“GlobalData forecasts that construction output in the UK will contract by 10.3% in 2020 as a whole, with the steep contraction in Q2 2020 being partially offset by improvements during the second half of the year. However, there are risks to the prospect of a solid recovery in the second half, particularly concerning the potential for a second wave of infections with lockdown measures being eased across the country.
“Over the past three months, construction output fell by a record 29.8%, driven by falls in new work and repair and maintenance. However, with the easing of lockdown measures in May, and with many construction firms returning to work, May showed a large month-on-month increase in output growth driven by a record increase in new works, which grew by 11.1%. The largest increase in new works came in the infrastructure sector, which increased by 12.7%, and in private new housing, which grew by 21.4%. Despite the 8.2% increase in growth in May, output was still 39.7% lower year-on-year, revealing the extent to which COVID-19 disruption has impacted the industry.”
Similarly, Jessica Levy, Director of Communications at the FMB said: “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.”
Jessica concluded: “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.”
