As the coronavirus pandemic hit the UK, the construction industry went into shutdown as major builders ceased operations help to stop the spread of the virus.
Although construction activity still remains much lower than prior to the lockdown, there are now signs of a rebound in the industry.
The sharp rebound was highlighted in IHS Markit’s UK Construction Purchasing’ Managers’ Index which rose to 58.1 in July.
A PMI reading of anything above 50 signals a rise in activity.
“Construction companies took another stride along the path to recovery in July as a rebound in house building helped to deliver the strongest overall growth across the sector for nearly five years. Civil engineering and commercial activity are also back in expansion, which has been mainly due to the restart of work that had been delayed during the second quarter of 2020,” said Tim Moore, Economics Director at IHS Markit.
“Survey respondents noted a boost to sales from easing lockdown measures across the UK economy and reduced anxiety about starting new projects. However, new work was still relatively thin on the ground, especially outside of residential work, with order book growth much weaker than the rebound in construction output volumes,” said Moore.
There was also increase in activity measured by the Office for National Statistics.
“The UK has now officially, and inevitably, entered a recession, with the economy shrinking by 20.4% between April and June, compared to the first three months of 2020,” said Charlie Carlton, Head of Digital at IronmongeryDirect.
“The construction industry has been hit hard by the pandemic, with the lockdown causing output to plummet since March. In April, it fell by a staggering 40.2% – the highest monthly fall since such records began in 2010.
“However, while construction output remains around a quarter (24.8%) lower than it was pre-lockdown, there are certainly signs of recovery. The latest figures from the Office for National Statistics show that output increased by 23.5% between May and June, which was also a record.
“The sectors which grew the most were repairs and maintenance of private housing (44%) and the building of private new houses (42.3%).
“In other more positive news, the number of unemployed construction workers dropped by 3,000 in the months between April to June (compared with March to May), and this was joined by a rise in average weekly earnings, from £578 up to £590. While this is 9% lower than the equivalent period last year, it is the first increase in 2020, so hopefully it will continue to rise.
“The slow, but visible signs of recovery are also evident in our sales figures, as IronmongeryDirect saw record numbers for both orders and revenue in June. We experienced an 80% year-on-year increase in web traffic and a 75% rise in transactions.
“While there is undoubtedly still a long way to go before the construction industry fully recovers, it’s great to see that there are a few signs of progress after an incredibly challenging few months. While we are about to hit a hard time as a nation, there can be hope that we’ll recover in full force.”