Construction output fell 40% in April

The latest report from the Office for National Statistics (ONS) has reported that construction output fell by 40.1% in April. The crash in output was driven by a 41.2% decrease in new work and a 38.1% decrease in repair and maintenance. All of these decreases were the largest monthly falls on record since the monthly records began in January 2010.

The decrease in new work (41.2%) in April was because of record month-on-month falls in all new work sectors; private new housing and private commercial were the largest contributors, falling by 59.2% and 39.7% respectively.

The decrease in repair and maintenance (38.1%) in April 2020 was because of record month-on-month falls in all repair and maintenance sectors; the largest contributor was private housing repair and maintenance which declined by 54.3%.

Construction output fell by record 18.2% in the three months to April 2020, compared with the previous three-month period; this was driven by a 19.4% fall in new work and a 15.8% fall in repair and maintenance.

Clive Docwra, Managing Director of McBains, said: “Today’s figures are further confirmation that the construction sector will face a hugely tough time to recover from the coronavirus pandemic. Particular concerns are private new housing work seeing a third consecutive month of large decline, exacerbated by the Covid-19 lockdown on April and now at its lowest level for a decade – bad news for the industry but also for prospective homeowners given the housing shortage. The record fall in private commercial new work also reflects the pause button being pressed on major projects.”

Gareth Belsham, from surveyors Naismiths, commented: “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.”