Sectors - Civil

Impact of Lockdown and Recovery Signs



The construction industry is on the road to recovery after the impact of the UK’s coronavirus lockdown. There is now less disruption to site work, more project-starts and more contract awards are anticipated as the industry gets back to work.

For many, looking back at activity over the three months to the end of June, this is welcome news, as the sheer scale of lockdown’s impact is astonishing, with the value of projects starting on site 45% down on in comparison to 2019, Glenigan reports.

Major projects were 45% lower than they were in 2019, and underlying projects, worth under £100m, were down 29% on the previous three months on a seasonally adjusted basis.

Overall, the value of contract awards averaged at £3.7 million a month in the three months to June 2020, which is a 36% drop from June 2019. This decline was led by a 52% fall in the value of underlying contract awards, In contrast to this, the value of major contract awards rose by 32% against 2019, to average £1.4 million a month.

The development pipeline also improved during the second quarter, with the overall value of planning approvals up 15% against a year ago. This rise was driven by a 51% jump in the value of major projects securing planning approval.

When looking at construction output, disruption to on-site work was greatest during April, when the country was in the midst of its lockdown. However, the CIPS Construction Index suggests that construction activity has improved during June. At 55.33, the June Index points to a marked increase in total construction output against the preceding month. Any figure above 50 indicates a rise in output.

Even though there’s still a long way to go until the market returns to normal, Glenigan’s data shows the most immediate, debilitating effects of the pandemic and lockdown seem to be easing, and the country is entering a phase of recovery.

 Glenigan is a partner of 2020 UK Infrastructure Show (UKIS), the UK’s leading infrastructure and supply chain event, which explores the latest developments across the sector. This year, UKIS is going online and will be delivered as a live, online interactive event on Wednesday 9 September 2020.

More information on what you can expect from this new digital event experience can be found by visiting the UKIS website here.

 

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