Construction: Is the Industry Heading in the Right Direction?

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From travel and retail, to leisure and creative arts, the pandemic has been a testing time for most industries in the UK. But, for the construction industry, it’s been a case of ‘keep calm and carry on’, as the industry has been one of the few allowed to operate within lockdown restrictions.

The result of this has been profound, with construction businesses reporting continued growth for seven consecutive months at the end of 2020.[1] Part of this success has been the fact the government urged construction work to carry on, hailing the sector as a major contributor to the UK’s economic recovery.[2]

The government has also hailed the role workers have played during the pandemic, including building Nightingale hospitals, supporting public services and helping to ensure buildings are COVID-secure.[3]

Although work has continued at pace, the industry hasn’t been free from delays. The first national lockdown had a major impact on output, and since then businesses have had to deal delayed projects, unreliable supply chains, increased purchasing costs and reduced productivity. On a positive note, though, the industry has managed to recover quickly, with statistics highlighting that construction output has risen past pre-pandemic levels.[4]

In this piece, Flogas Britain looks at the challenges the construction industry has faced and how it has managed to battle against the economic slump and come back looking stronger than ever before.

The challenges of COVID

Whilst the construction industry looks to be in better shape, it still had its own struggles during early stages of the pandemic. Figures from the Office for National Statistics (ONS) show that output decreased by more than 40%[5] in April 2020, with new work down 41% and repair and maintenance work reducing by 38%. It was the biggest downturn in a decade and resulted in a £5.1 billion loss.

A survey also showed that 68%[6] of construction business owners have had to delay operations at some point during the pandemic, impacting project timelines and profitability.  Supply chain reliability has been another issue, with nearly 70% of respondents admitting that they’ve been unable to get hold of goods and materials. Other restrictions, like trade and travel, have also had an impact on productivity, with 42% saying it was biggest issue they’ve faced.

New health and safety measures have caused more challenges too. Back in May, the government published COVID-safe guidelines for the industry to be able to continue operating. The guidelines cover ‘construction and other outdoor work’[7] as well as ‘other people’s homes,’[8] and highlight key areas, such as social distancing, risk assessment, cleaning and personal protective equipment (PPE).

This has resulted in companies having to act quickly in order to be compliant with the guidelines and implement new ways of working. It’s also had an impact on how many people can be on site at one time, reducing productivity levels in the process.

 Support from government

Despite several challenges, the industry is returning to steady performance levels. Strong order books have helped drive the sector’s recovery, as well as the continued rise in housebuilding and expanding commercial work.[9] Such is the progress being made, that industry optimism is reported to be at a three-year high, with 50% expecting a boost in business activity in 2021.[10]

A key element of this has been support from the government. The stamp duty holiday and help-to-buy scheme have increased house sales, with new orders increasing at the fastest pace for nearly five years.[11] To upgrade local infrastructure and spark a green economic recovery, housing secretary Robert Jenrick has pledged £1.3bn worth of investment for the sector.[12] The investment will lead to 45,000 new homes and create up to 85,000 jobs, with around 65m kgs of CO2 emissions across England being reduced as a result of the project.

Plus, in a move to kick start construction, the Prime Minister is committed to helping the UK ‘build, build, build’ and has introduced “the most radical changes to our planning system since the Second World War.”[13] New regulations remove unnecessary red tape, making it easier for new homes to be built.

Commercial premises can change to residential use without planning permission – removing the process involved for builders to demolish and rebuild vacant or redundant buildings as new homes.

Building brick by brick

As the fight against the pandemic continues, the construction industry looks to be in a strong position. But, like so many others, it has faced plenty of challenges. As the pandemic continues to impact normal life, it’s difficult to predict exactly what the future holds.

Also, we’re yet to see the full impact of Brexit on the industry. But, when you look at performance figures and the level of investment and support pledged by the government, it does suggest that it may be a bright future for UK construction.

The industry isn’t just a crucial part of building back the nation’s economy, but as the move towards becoming Net Zero by 2050[14] continues, it will help ‘build back better’, and greener.

[1] https://www.cips.org/supply-management/news/2021/january/construction-supply-chains-groaning-at-the-seams/

[2] https://www.building.co.uk/news/new-business-secretary-tells-construction-to-keep-going-during-lockdown-on-first-day-in-role/5109817.article

[3] https://www.pbctoday.co.uk/news/planning-construction-news/uk-construction-industry-2/85371/

[4] https://www.theconstructionindex.co.uk/news/view/construction-output-rebounds-to-pre-covid-levels

[5]https://www.ons.gov.uk/businessindustryandtrade/constructionindustry/bulletins/constructionoutputingreatbritain/april2020

[6] https://www.chas.co.uk/blog/covid-impact-on-construction-industry/

[7] https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/construction-and-other-outdoor-work

[8] https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/homes

[9] https://www.markiteconomics.com/Public/Home/PressRelease/e0804378d11a400bb5512c68a97e4a7b

[10] https://www.markiteconomics.com/Public/Home/PressRelease/e0804378d11a400bb5512c68a97e4a7b

[11] https://www.theguardian.com/business/2020/nov/05/rise-uk-construction-sector-economic-builders-contraction-lockdown

[12] https://www.gov.uk/government/news/1-3-billion-investment-to-deliver-homes-infrastructure-and-jobs

[13] https://www.gov.uk/government/news/pm-build-build-build

[14] https://www.gov.uk/government/news/uk-becomes-first-major-economy-to-pass-net-zero-emissions-law

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