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12th June 2020
Construction activity climbs post-lockdown – but we’re not out of the woods

According to recent data, things appear to be looking up for the construction industry. In May 2020, the IHS Markit/CIPS UK Construction Total Activity Index recorded a score of 28.9, bouncing back from April’s score of 8.2 – which marked the sharpest decline in UK construction industry output since the survey began 23 years ago[1].

While the widespread reopening of construction sites and a marked improvement in construction output bodes well for the industry’s recovery, activity still sits well below pre-lockdown levels of 39.3 in March and 52.6 in February. Any reading below the 50 no-change mark is indicative of a contraction in activity, meaning that the industry still has a long way to go until it’s out of the woods. 

Wider concerns

Beyond the immediate concern of implementing strict safety guidelines on sites, the survey also revealed longer-term concerns among construction companies, including the impact on employment once the furlough scheme comes to an end, concerns about cash flow, rising costs and falling demand for new construction projects, among others.

“Scope for hope”

With dismal forecasts for the future of the industry pouring in from all sides, it’s unsurprising that many firms are finding it difficult to hold on to hope for the future. But, according to the RIBA Journal, the official publication of the Royal Institute of British Architects, there is “scope for hope”[2], particularly in the home improvement sector. Up and down the UK, the lockdown has hugely increased the value of home and space, and sparked a rising need for a dedicated place to work from home; this may result in households investing more heavily in improving their homes.

Hope from China?

The coronavirus outbreak was first identified in Wuhan in December 2019, leading to a strict lockdown in China that brought the country’s construction industry to a grinding halt. Similarly to the UK, activity plummeted as workers downed tools to prevent the spread of the virus. However, by 15 March, construction work had resumed on 108 major rail construction projects, while 10,965 new projects were launched in April alone[3]. With many UK firms concerned about the future, China’s example may offer some comfort that recovery is possible.

Supporting your clients

Here at Focus, we offer a wide range of high-quality Construction Products to support your clients through this difficult time. The Construction market may be hardening, but Focus’ extensive access to markets for niche and difficult-to-place business could provide your clients with the lifeline they need to get back up and running. Just contact us on 0345 345 0777 or email sales@focus-insurance.com.

[1] https://www.constructionmanagermagazine.com/construction-activity-picks-up-with-return-to-sites/

[2] https://www.ribaj.com/intelligence/construction-market-whats-next-after-coronavirus-covid-19-recession-housing-innovation

[3] https://www.designbuild-network.com/comment/construction-investment-china-recovering/

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