Covid 19 – Is Construction Turning the Corner?

In what has been an exceptionally challenging period for all, it has been inevitable that property related businesses have suffered in recent months, with projects being placed on hold whilst we all endure the Covid-19 crisis. According to Barbour ABI, the index for construction, in March 2020 construction activity “fell at the steepest rate since the financial crisis in 2009”. Indeed, this synopsis is supported by our direct experience at Fellows, whereby a number of projects were frozen as construction sites closed.

Whilst this period has most certainly been a challenge, do we now have reasons to be optimistic?

In the last week or so there have been repeated signs that things are changing and there is a general perception that the market is actually starting to gain momentum once again.

As building contractors and their subcontractors come to terms with the new normal that is operating under the CLC social distancing guidelines, many clients who have paused developments, are now looking to reassess their portfolios, with many schemes looking to restart during the month of May.

We are certainly seeing this at Fellows. Over the last week, our teams are reporting encouraging increases in the amount of labour and materials on site, as sub-contractors return and supply chains re-open for business. In addition to this, last week alone we have seen a number of developments recommence across Worcester, Shropshire and the Greater West Midlands, for clients such as the Wrekin Housing Group, Platform Housing Group and Floreat Living. This is in addition to the activities of key clients such as Lok’nStore who continue to pursue a full development programme regardless.

Significantly, our experience is also supported by the data, with Barbour ABI confirming that up to the 24th April 2020; “we have seen an overall reduction in delayed projects and an increasing number of projects starting to reopen. We have also seen a significant increase in sites confirmed as open. We expect this trend to continue in the coming weeks”.

Encouragingly, that trend has continued, with the construction data analysis firm reporting that “this week has seen an increase in active construction projects across the UK. The volume of restarted projects will also continue to increase over the coming weeks as housebuilders have confirmed they will return to site to carry out their plans. In the planning environment, new applications and decision updates continue to strengthen“.

If this continues, it is both encouraging and significant that a vital industry such as construction (representing 7% of UK economy) has embraced the practical challenges this public health emergency has posed. It is not only a testament to clients, contractors and consultants who have embraced this new normal – but the UK Government, Construction Leadership Council, RICS and HSE to name but a few – who have worked proactively to refine a set of guidelines and a system of working, that strikes the right balance between public health, productivity and economic working.

There are of course inevitable challenges ahead, but in the long-term, the adversity caused by Covid-19, may create opportunity and fundamentally change our industry forever.

If you require any additional support at this time, be it some professional advice or simply a healthy and optimistic chat then please do not hesitate to get in touch.