{"id":80363,"date":"2020-08-04T09:44:20","date_gmt":"2020-08-04T08:44:20","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=80363"},"modified":"2020-08-04T09:44:20","modified_gmt":"2020-08-04T08:44:20","slug":"covid-19-construction-industry-2","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/covid-19-construction-industry-2\/80363\/","title":{"rendered":"2021 construction output expected to be 6.4% lower than pre-Covid levels"},"content":{"rendered":"

Despite the government putting industry at the centre of its recovery plans, the full impact of Covid-19 is expected to spell uncertainty for the construction industry<\/h2>\n

According to the Construction Products Association\u2019s<\/a> (CPA) latest forecasting, changes to the UK economy brought on by the Covid-19 pandemic, and uncertainty around consumer confidence and unemployment rates, could prove significant to construction industry activity returning to pre-Covid growth rates.<\/p>\n

Although activity on-site returned quicker than initially expected post-lockdown, the CPA Summer Scenarios still anticipates construction output<\/a> in 2020 to fall by 20.6%. The worst affected sectors include private housing (-33%) and commercial (-29%).<\/p>\n

The report suggests that returns to construction sites from mid-May were largely to drive completions on existing projects and refurbishments that couldn\u2019t take place during the restrictions.<\/p>\n

However, uncertainty remains around long-term demand and future orders given the state of the wider economy.<\/p>\n

Priority for housing projects<\/h3>\n

Completions have been prioritised for housing projects since the easing of lockdown. This is due to the first phase of construction for Help to Buy<\/a> requiring completion by 31 December, and a stamp duty holiday announced by the government.<\/p>\n

Although the long-term confidence for new developments seems fragile with the prospect for rising unemployment and signs that lender appetite is worsening.<\/p>\n

Shifts in consumer confidence due to the Covid-19 pandemic<\/a> is also impacting the commercial sector. The sector is grappling with larger structural shifts towards e-commerce, accelerated by the shutdown of non-essential retail, as well as the potential shift towards homeworking, reducing the demand for city centre office developments and diverting retail spending further away from high streets to online.<\/p>\n

\u2018Build, build, build\u2019<\/h3>\n

Although the government promised \u00a35bn of construction investment under the \u2018New Deal\u2019<\/a> with the slogan \u2018build, build, build\u2019, CPA points out that this was largely a re-announcement of existing budgets.<\/p>\n

Therefore, it is likely the \u2018New Deal\u2019 will have little impact on boosting activity in the construction industry beyond what was already expected after the Covid-19 pandemic.<\/p>\n

While measures in the chancellor\u2019s recent Summer Statement could potentially have a significant impact on construction, the extent of this is still unclear given the lack of new funding and a lack of clear strategy on the implementation of the \u00a32bn Green Homes Grant<\/a>.<\/p>\n

CPA\u2019s economics director, Noble Francis, said: \u201cThe quicker-than-expected return to sites is certainly a positive sign, and evidence of the CPA\u2019s main scenario of a \u2018tick\u2019 shape sharp recession and recovery, with coronavirus a temporary issue primarily affecting economic activity in the first half of 2020.<\/p>\n

\u201cWhile government plans for a \u00a32bn Green Homes Grant is welcomed news for the industry, the key will be in the delivery of this policy, ensuring it provides long-term, patient finance rather than being spent quickly and thoughtlessly.<\/p>\n

\u201cWhile next year we anticipate construction output rising 18.0% overall, it is worth noting that this is compared with a low base of activity in 2020 and will still be 6.4% lower than pre-coronavirus levels.<\/p>\n

\u201cThe delivery of major infrastructure projects will be crucial to growth in 2021, with activity on site less affected by social distancing and major projects like HS2<\/a> driving significant growth for the sector.\u201d<\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

Despite the government putting industry at the centre of its recovery plans, the full impact of Covid-19 is expected to spell uncertainty for the construction 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