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May's construction output down 40% on pre-Covid levels

14 Jul 20 Construction output in Great Britain grew by 8.2% in May 2020 as the industry began its return to work after the big shutdown in April, official numbers show.

More than a third of the industry was on furlough that month
More than a third of the industry was on furlough that month

On the graph it looks like a tiny up-tick, but actually that 8.2% represents a record for monthly construction growth in the country.

That's the good news.

However, construction output in Great Britain had collapsed by a record 40.2% in April 2020. So even given May’s 8.2% rise, at £8,253m it was still down nearly 40% on February 2020 before the economic impact of the coronavirus pandemic began to be felt.

In May 2020 there was monthly growth across all sectors apart from public other new work and public housing repair and maintenance, the Office for National Statistics said.

In the three months to May 2020, construction output fell by a record 29.8%, compared with the previous three-month period; this was driven by record falls of 30.3% in new work and 28.9% in repair and maintenance.

The decrease in new work (30.3%) in the three months to May 2020 was because of record falls in most of the new work sectors; private new housing and private commercial were the largest contributors, falling by 42.5% and 29.5% respectively.

The decrease in repair and maintenance (28.9%) in the three months to May 2020 was because of record falls in all repair and maintenance sectors; the largest contributor was private housing repair and maintenance, which fell by 39.8%.

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Previous ONS reports revealed that 36.5% of the workforce in the construction sector was on furlough during the second half of May.

Industry comment

Fraser Johns, finance director at construction contractor Beard, said: “After April’s huge 40% drop in output, it’s encouraging to see May’s figures beginning to point towards a recovery in construction work. It has been one of the sectors worst-affected by Covid-19, and for the construction industry itself and also for the health of the wider economy, it is vital that this recovery continues to gather pace.

“Under normal circumstances, a month-on-month increase of 8% would be something to shout about, but with output still nearly two-fifths lower than in February, it will clearly be a long haul to get back to similar volumes as before the lockdown. Many firms will continue to suffer in the meantime, but the industry is adapting to new working procedures and finding ways to increase efficiency. Times are likely to remain hard for some time to come, but we will get through this.”

Clive Docwra, managing director of construction consultant McBains, said: “Today’s figures reflect just how much of a historic downturn the industry is experiencing. In particular, record decreases of more than 40% in new housing work and almost 30% in commercial work over the three months to May highlight how essential it is that the government does all it can to get construction moving again. 

“Although May saw a rebound as construction started to return to work, this is all relative, with output 38.8% lower compared with February before the pandemic hit.  It will take several months for the sector to truly recover.”

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