UK construction output to drop by a quarter

The Construction Products Association (CPA) estimates that construction output in the UK will plunge by a quarter in its most optimistic assessment.

The CPA revealed that the output in the industry will have a drop of 25% during 2020 and then a rebound of 26% for 2021. The CPA described this as the most optimistic view and is just one of a few scenarios included in their forecast.

If a second wave of the virus sweeps across the UK a return to lockdown would get in the way of the industry getting back up to speed causing a longer period of low activity. If this does happen then the CPA expects that output could fall by almost a third  and would be 19% lower than the 2019 figures by the end of 2021.

In April, it was reported that 60% of planned output was lost due to the nationwide lockdown and social distancing measures. Numerous construction projects throughout the UK were put on hold or severely reduced in progress.

The falls in output varied across nations with an estimated 83% of construction work in Scotland lost due to them implementing stricter lockdown measures, where all non-essential construction work was required by the government to be stopped.

The worst affected sector was house building, with 85%t of work being lost.

‘For the fortunes of construction more generally, the near-term effect of COVID-19 on the economy and employment are likely to be considerably greater than those faced during the financial crisis of 2008/09… Even in our most optimistic scenario, construction output bounces back by 25.5% in 2021 but, with growth starting from a low base, output will still be 6% lower than in 2019.’ – Noble Francis, Economics Director for CPA