Construction Output falls 35% in Q2
The UK economy has slumped into recession with Q2 GDP shrinking 20% according to data revealed by the Office of National Statistics (ONS). The full impact of the Covid-19 crisis on construction sector has also been laid out with construction output falling by a record 35.0% in Quarter 2 (Apr to June) 2020 compared with Quarter 1 (Jan to Mar) 2020; this was driven by record falls of 35.2% in new work and 34.7% in repair and maintenance.
The decrease in new work (35.2%) in Q2 2020 was because of record quarterly falls in almost every new work sector; the largest contributor was private new housing, which fell by 51.2% in Q2 2020 compared with Q1 2020.
The decrease in repair and maintenance (34.7%) in Q2 2020 was because of record falls in all repair and maintenance sectors; the largest contributor was private housing repair and maintenance, which fell by 46.5% in Q2 2020 compared with Q1 2020.
Brian Berry, chief executive of the FMB has called on the government to use the forthcoming Budget to invest in housing stock, both new builds and improving existing buildings. Mr Berry claimed this approach will support recovery in the construction industry and create jobs.
Mr Berry said: “The government must prioritise bringing forward planning reforms and investing in local authority planning departments to help house builders start building out new sites swiftly. Investment in construction apprenticeships is also important, as this will create jobs for young people in a sector that has historically struggled with skills shortages.
“Investing in our existing buildings offers opportunities for communities across the UK, and is labour-intensive work. I’m calling for an ambitious national energy efficiency retrofit strategy that builds on the Green Homes Grants scheme, to give long-term confidence in this growing market and to achieve the scale of change that’s needed.”
New orders decreased by a record 51.1% in Q2 2020 compared with Q1 2020; this decrease was because of record falls in both all other work and new housing, which declined by 51.9% and 49.0% respectively.
The value of New orders in Q2 2020 was £6,173 million; this is the lowest level of new orders since records began in Q1 1964.
The annual rate of construction output price growth was flat (0.0%) in June 2020, which was the lowest rate of growth since records began in 2015.
However, construction did begin to recover as lockdown was eased when monthly construction output grew by a record 23.5% in June 2020, substantially higher than the previous record monthly growth of 7.6% in May 2020; despite this strong monthly growth, construction output in June 2020 remains comparatively low at 24.8% below the February 2020 level, which was before the full impact of the coronavirus (COVID-19) pandemic.
