In an environment of Covid-19-induced commercial extremes, the fall in UK construction activity in April 2020 will take some beating. In the latest survey by IHS Market/CIPS monitored by Kallanish, around 86% of the survey panel reported a fall in activity since March. There were rapid falls in all main areas of construction activity and new orders slumped as clients froze spending plans.
The headline seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index fell from 39.3 in March to 8.2 in April, to signal a rapid downturn in overall construction output. Moreover, the latest reading was the lowest since data were first collected in April 1997. The previous record low was 27.8 in February 2009. It must be remembered that any figure below 50 signals a negative trend.
The total activity index was not the only record low caused by the coronavirus pandemic. All three main categories of construction work experienced a survey-record fall during April, with the steel-intensive commercial sector registering an activity index of just 7.7. The latest lengthening of average lead times for the delivery of construction products and materials was by far the steepest since the survey began in April 1997.
New business volumes fell at a rapid pace in April, with the downturn by far the steepest recorded in more than two decades of data collection, Markit/CIPS says.
Business expectations for the year ahead dropped slightly since March and equalled the survey-record low seen in October 2008. Construction firms widely noted concerns beyond simply reopening sites, including cash flow difficulties across the supply chain, rising costs and severely reduced productivity.
