Coronavirus: UK construction sector grinds to a halt in worst month on record
UK construction sector activity juddered to a halt in April, survey data has shown, as coronavirus lockdown measures pushed the industry to its worst month on record.
The IHS Markit/Cips construction purchasing managers’ index (PMI), a gauge of the health of the sector, plunged to an all-time low of 8.2 in April from 39.3 in March.
A score of below 50 indicates contraction, and the latest reading was by far the lowest since data was first collected in 1997. The previous record low was 27.8 during the financial crisis.
Duncan Brock, group director at Cips, the Chartered Institute of Procurement & Supply, said: “The coronavirus continued to ripple across supply chains, devastating all productivity in its wake.”
“Though a fall in output was not a complete surprise, the scale and suddenness of the drop has knocked the wind out of building work in the UK.”
Although building sites have been allowed to stay open, in practice the vast majority have shut to avoid putting workers at risk and as demand slumps.
House-building felt the brunt of the pain in April, data firm IHS Markit said, with its PMI gauge crashing to 7.3. Commercial activity and civil engineering activity both plunged.
Alongside mass site closures, the sector was hit by severe disruption to supply chains. closures at builders merchants and stoppages of manufacturing production led to widespread supply shortages.
Construction firms said they had laid off or “furloughed” workers at a dramatic pace. Many reported that they were using the government’s job retention scheme until sites could reopen.
Construction firms gloomy about future
Prime Minister Boris Johnson is set to outline a plan in the coming days to reopen some parts of the economy.
However, construction companies expressed concern about reopening sites. Many businesses fear that they will be hit hard by social distancing measures.
Tim Moore, economics director at IHS Markit, said: “The rapid plunge in UK construction output during April stands out even in a month of record low PMI data for the manufacturing and service sectors.”
“The prospect of severe disruption across the supply chain will continue over the longer-term,” he added.
“Looking ahead, construction companies widely commented on worries about cash flow, rising operating costs and severely reduced productivity.”