The construction industry has not downed tools during the coronavirus crisis, even if work was temporarily paused at a number of sites.
As an industry, we have continued to put money in people’s pockets and helped to keep the economy ticking over. But as sector we are not in a good place. Yesterday, Construction News reported that 18 construction firms fells into administration in June. This followed on from 30 construction companies in May, 9 in April and 32 in March. The Office for National Statistics reported construction activity fell by 40 per cent in April. The industry is reporting significant reductions in revenue – over the short term at least.
The wider economic outlook is grim, too. The OECD has forecast that the UK’s national income will slump by 11.5 per cent this year, outstripping the falls it predicts for France, Italy, Spain and Germany. It is also likely that Brexit will have an impact.
Despite this gloomy prognosis, the construction sector can be the catalyst to kickstart the UK economy over the next two years. History shows the construction industry is the tried and tested means of driving economic recovery, just as it did after the Second World War. The fact that we manufacture the vast majority of our materials in the UK, rather than importing them from the EU, means the building supplies market should remain relatively unaffected by Brexit.
Government pledges will help the industry
Construction provides skilled jobs and a fast return on investment. If the government prioritises job creation, skills and infrastructure spending – as the prime minister has pledged – the industry could be well placed to bounce back quickly following an extremely challenging period.
“History shows the construction industry is the tried and tested means of driving economic recovery, just as it did after the Second World War”
The upstream and downstream jobs in manufacturing, architecture, planning, engineering, distribution and construction, are a powerful force for economic expansion. Consider the headline figures: in 2018, the economic output of the construction sector, according to the Construction Leadership Council (CLC), was worth £413bn, equivalent to 8.6 per cent of GDP. This is nearly four times the combined annual output of the aerospace and automotive industries.
The construction sector employs more than three million people in the UK in contracting, associated manufacturing and professional services. More than 400,000 employers define themselves as construction companies including 900,000 sole traders, 300 large contractors and a further 41 per cent of the workforce (943,000) are self-employed.
The prospects for the construction industry are encouraging. The CLC estimates that there are more than 700 planned investment projects and more than £500bn of investment in the National Infrastructure Pipeline, including £118bn in the Construction Pipeline. Between £29bn and £37bn of infrastructure projects will be brought to market in the remainder of this financial year, according to the Infrastructure and Projects Authority (IPA), the governmental body which reports to the Cabinet Office and the Treasury.
Our support is needed
The CLC’s Roadmap to Recovery set out a strategy that all of us working in construction should support to drive the economic recovery. It aims to increase the level of activity across the construction ecosystem, accelerate the process of industry adjustment to the ‘new normal’, and build capacity in the industry to deliver key strategic priorities. These include increasing prosperity across the UK; decarbonisation; modernisation through digital and manufacturing technologies and delivering better, safer buildings.
It’s a strategy that will create jobs and train a new generation of skilled workers – acting as a catalyst for growth and deliver tax income for HMRC.
A COVID-19 economy recovery plan by Dr Steve McCabe and Mike Leonard of Birmingham City University’s Institute for Design and Economic Acceleration, argues that a £11bn investment in the construction sector could create significant employment and produce a £33bn return.
It’s not all about the high-profile, mega schemes either. When it comes to “shovel-ready projects” that will deliver the recovery and put local people to work, the more modest health, education and infrastructure projects deliver short and medium-term results. At any given time an average school building project will employ 60 people on site for 18 months.
If the country needs cause for optimism as we begin to emerge from the COVID-19 crisis it should start by adopting the mantra: “Get Britain Building”
Original Article by: Construction News
