How the UK construction industry is bouncing back

How the UK construction industry is bouncing back

How the UK construction industry is bouncing back

When the nationwide Covid-19 lockdown came into force in March 2020, every sector in the UK was caught off-guard, and non-more so than the construction industry. However, as the months progressed and construction was allowed to resume – albeit in a more streamlined way, the construction industry was able to if not bounce back, at least claw back some lost ground.

The pandemic also revealed the need to accelerate initiatives and highlighted shortfalls within the sector. Most notably, the repatriation of migrant workers demonstrated the sector’s vulnerability to labour shortages and supply chain disruption.

Supply chains

The sudden imposition of lockdown measures highlighted how little stock construction sites and suppliers hold in the UK. From cement and paint shortages to timber holdups and multi use silicone sealant products such as caulk.

While there have been calls to address the issue of precarious inventories, this is a difficult challenge to solve because much of the manufacturing capacity for construction materials has moved offshore, and given the ongoing complications with Brexit this will be a long-term issue.

Repatriating elements of the supply chain will come at a cost and the industry need to be prepared to pay the additional expense of having local sourcing options if it wants a secure supply chain, which will of course impact the sectors overall growth.

Commercial and residential projects

The stripping back of project teams as a result of the pandemic revealed the potentially inefficient nature of many construction workforces. This realisation meant that rather than cutting construction jobs, it’s time to deploy them in a more efficient way, especially in large-scale commercial projects.

Prior to the pandemic commercial construction centred heavily around office sector building, however, given that new figures suggest that fewer than one in five employees want to return to the office full-time, we could see a greater shift towards residential projects. As more people continue to work from home, new build sites could focus their attention on work from home set-ups as commuter villages become more popular.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said:  “The residential sector had been relatively immune to the effects of lockdowns and pandemic disruptions, but it too was beginning to show signs of weakness for the first time in over six months.”

Growth forecasts

In early 2021, the construction industry saw a 14.0% rise following an estimated contraction of 14.3% overall in 2020 caused by the sharp fall in the first half of last year. It’s also estimated that the output is only expected to recover to pre-Covid level in 2022.

There is also a risk that one the furlough and self-employed support schemes end, there may be a sharp rise in unemployment that could potentially dampen this recovery. It’s not just potential unemployment and knock-on Covid pandemic that could affect growth, but delays in the supply chain.

How the UK construction industry is bouncing back
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How the UK construction industry is bouncing back

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How the UK construction industry is bouncing back
BDC 280. MAY 2021

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How the UK construction industry is bouncing back