Battered builders struggle in record slump
Builders are gradually returning to work but the sector is still in the grip of the worst downturn on record, the latest gloomy industry figures show.
The UK’s construction sector was urged back to work by Prime Minister Boris Johnson almost a month ago, but activity among builders is still in the doldrums according to the latest snapshot from the Chartered Institute for Procurement and Supply.
Its index - where a score under 50 signals industry contraction - recovered partially from a disastrous 8.2 in April to 28.9 last month but is still languishing at levels last seen in the depths of the financial crisis in February 2009.
Nearly two-thirds of firms surveyed saw falling activity during May, while only one in five signalled expansion.
Duncan Brock, CIPS director, warned of more damage to come as state support schemes are gradually unwound. He said: “As the furlough scheme is unravelled towards the end of the summer, the floodgates preventing redundancies may also fly open and job losses will follow without a strong pipeline of work waiting in the wings.”
His fears were underlined this week by industry figures showing the number of building contracts awarded in May slumping by more than half on a year earlier, while future tender opportunities have seen an even bigger 66pc slump.
Builders are also braced for much tougher working conditions as the industry adapts to social distancing on sites against a backdrop of subdued demand.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The construction sector started to revive from the Covid-19 shock in May, but a complete recovery in activity to pre-virus levels in the second half of this year remains highly unlikely.”
The Office for National Statistics’ latest faster indicators showed 35pc of construction firms that had temporarily halted trading were now gearing up to restart within the next two weeks.
Across businesses overall, 24pc of those that paused trading expect to start again in the next four weeks while 31pc expect to begin again in more than four weeks’ time.
Its survey suggested firms have furloughed 27pc of their workforce, with those that temporarily ceased trading due to Covid-19 standing down 78pc of staff. The latest Government figures show 8.7m jobs furloughed so far.
