UK construction sector has worst month since 2009 amid coronavirus lockdown
UK construction sector output plunged at the fastest rate since the financial crisis in March as coronavirus containment measures shut down sites and caused new orders to slump, survey data has shown.
The IHS Markit/Cips construction purchasing managers’ index (PMI) tumbled to 39.3 in March from 52.6 in February. This was the lowest since April 2009. A score of below 50 on the gauge, which measures the health of the sector, indicates contraction.
The UK construction sector has been one of the worst-affected areas of the economy during the coronavirus outbreak. Work cannot be done from home and social distancing on site is very difficult.
Construction firms have also criticised confusing government advice. A government body initially recommended site workers stay two meters apart. The advice was withdrawn after uproar from the industry, although roughly half of sites are thought to have closed.
Such closures and lower workloads led firms to lay off workers at the quickest pace since 2010 in March, data firm IHS Markit said.
Sign up to Morning Wire’s Midday Update newsletter, delivered to your inbox every lunchtime
The civil engineering sub-sector, which focuses on infrastructure, suffered the biggest fall in output. This was closely followed by commercial building work.
Residential construction also fell but to a smaller extent. However, residential building companies said site shutdowns meant housebuilding could be about to plunge.
UK construction sector set to worsen
“The closure of construction sites and lockdown measures will clearly have an even more severe impact on business activity in the coming months,” said Tim Moore, economics director at IHS Markit.
Duncan Brock, group director at Cips, the Chartered Institute of Procurement & Supply, noted that said “construction companies registered their lowest levels of optimism since October 2008”.
He said things had been looking up for the sector in February. But now “any hope of a continuation of growth was mercilessly bulldozed away in March”.
“With no upturn in sight, and with the fastest level of layoffs since September 2010, the sector is stuck in quicksand and sinking further,” Brock said.
“The brutality of this impact cannot be underestimated, andthe sector has not hit rock bottom yet.”