Marco Verdonkschot, Managing Director at IronmongeryDirect, comments on the potential impact of a second lockdown on the construction industry.
“With rising case numbers and hospital admissions, the announcement of a second national lockdown was perhaps inevitable, but businesses will be hit hard once again. However, the construction industry is exempt from workplace closures and this will hopefully allow recent signs of recovery to continue.
“Driven by increases in new work (17.5%), construction output rose by 3% in August (the latest data available) to nearly £12,500 million, marking the fourth successive month of growth for the industry. Such sustained growth is a healthy indicator of confidence returning to the sector, with companies across the UK willing to commission fresh projects. New private housing has been performing particularly well and will be boosted by the news that such work is unaffected by a second lockdown.
“The Prime Minister also announced that the furlough scheme will be extended until December, with employees still receiving 80% of their salary. While the number of construction workers on furlough has been dropping rapidly each month – the quickest proportionate decrease across all sectors – the latest data shows that there were still over 275,000 people on the scheme in July. Therefore, the extension of the funding will be greatly welcomed by many in the industry.
“Despite being able to continue operations, the second national lockdown will undoubtedly put extra strain on the construction industry and we may see the rate of recovery slow down further.
“However, the sector is proving to be incredibly resilient and has shown this year that it can rebound strongly after challenging setbacks. The government’s announcement at the weekend has given the industry a chance to continue its growth and hopefully it can end the year in a strong position.”