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Construction output collapses by 40% in April

June 2020

“The construction sector’s famous volatility has long given it an unwanted reputation for boom and bust,” says Gareth Belsham, Director of Naismiths, responding to the latest ONS stats that showed a 40.1% collapse in construction output in April.  “But even the thickest skins have been pierced by the simultaneous collapse in demand and output unleased on the sector by the Covid crisis,” continues Belsham.

“Conventional construction techniques do not lend themselves to remote working or social distancing, and the closure of sites brought most work to a screeching halt in April.  Even though the UK Government eased lockdown restrictions on the sector much earlier than it did on other parts of the economy, the damage was already done.”

“At over 40%, construction’s month-on-month fall in output was more than double that seen in the services sector in April. Not all parts of the economy suffered equally.”

“Fortunately April’s brutal milestone may yet be the high-water mark for construction’s pain. With sites now reopened and work resuming, albeit under strict social distancing rules, the speed of decline is easing.  But if April saw the moment of impact, the coming months will see the whiplash effect. Damaged business confidence and shrivelling levels of investment will continue to shake the construction industry for many months to come. The road to recovery will be long and fraught.”

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