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The Impact of Covid on the Construction Industry

COVID-19 has had a huge impact on individuals and businesses over 2020. With lockdowns and safety measures implemented by the government for different areas, the disruption it has caused for different industries has been huge. After being advised to continue working throughout the pandemic, we look at the impact of Covid on the Construction Industry.

The Construction Industry was encouraged to carry work on despite the different lockdowns and restrictions we’ve seen as a country. But continuing work doesn’t mean that it hasn’t struggled, and there are many different factors that have contributed to this. We’ve seen supply chain issues, extra health and safety measures in place, site closures, furloughed staff, and project delays. And despite this Government instruction, many took the decision to pause work throughout the pandemic to put new measures into place that would align with the Construction Leadership Council’s Site Operating Procedures.

As a result of extended safety measures and site closures, according to the Office for National Statistics, the impact of COVID caused productivity losses of around 35% on the UK’s construction sites. Additionally, total construction output decreased by 45.2% in April.

Glenigan looked at the construction projects on their database to see how the pandemic has affected, and will affect, certain sectors within the industry:

Housing

  • House builders prioritised private housing sites that were near completion once work resumed
  • Private housing project starts are predicted to fall by 38% this year
  • 4% of social housing projects still stalled after most sites were re-open by the end of October 2020

Industrial

  • Project starts were 47% lower in the second quarter of 2020 than last year
  • The pandemic affected the need for more logistic space, as online retailing has massively increased

Offices

  • UK recession and increased unemployment will affect the demand for office space
  • The value of office project starts will potentially fall by 26% this year

Another key impact that many in the Construction Industry have faced is serious cash flow issues. These could be caused by or have caused delays. Projects within the construction industry require many different teams to work together. For example, contractors, sub-contractors, suppliers, etc. If one is negatively affected, they all are.

As a result of this, many companies have seen employees laid off. In research from the University of Wolverhampton, an interviewee involved ‘admitted that 75% of their recruited staff have been laid off by employers and warned of increased skill shortage issues in the workplace.’

Despite the negative impact that the pandemic has caused to the Construction Industry, one of the major drivers in its growth going forward will be more Government funding into the education, health, civil engineering, and the community and amenity sectors. The industry has had no choice but to adapt to new rules and regulations. Consequently, we’ve seen companies become more resourceful. Businesses are adapting to safer working conditions during, and in the recovery from, Coronavirus.