The Covid-19 outbreak has led to UK’s construction industry witness its worst decline in more than two decades in April, as large number of real estate players have closed their sites. IHS Markit, the report tracking the industry, said its gauge of activity fell to 8.2 last month from 39.3 in March, the lowest since data were first collected in April 1997. Shockingly, this is significantly lower than the previous record low of 27.8 in February 2009 at the height of the financial crisis.
Signalling the lack of confidence, more than four-fifths of firms of those surveyed (86%) reported a drop in business activity since March, while only 3% reported an increase. Among the hardest hit were the residential and commercial construction sectors while even civil engineering registering a decline.
“Widespread site closures and business shutdowns across the supply chain meant that vast swathes of the construction sector halted all activity,’’ said Tim Moore, economics director at IHS Markit.“Construction companies widely commented on worries about cash flow, operating costs and severely reduced productivity, as well as a slump in demand.’’
The data follow grim surveys on services and manufacturing, and indicate that Britain could be facing its sharpest ever economic collapse. The closure of builders’ merchants and manufacturing stoppages led to widespread shortages of materials. About three-quarters of construction companies reported longer delivery times from suppliers, and also highlighted a lack of safety equipment such as face masks and goggles for their workers.
According to a report, house sales in the country have virtually came to a halt since lockdown measures were introduced in the last week of March. This has prompted the Office for National Statistics to temporarily suspend its UK house price index. It said the lockdown was “expected to greatly reduce the amount of housing transactions” in April, making it very difficult to produce a national measure of house prices.