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Construction Industry – Update June 2020
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The Government has announced today that the number of workers on UK payrolls dived more than 600,000 between March and May. Meanwhile, the number of people claiming work-related benefits – which includes the unemployed – was up 126% to 2.8 million.
The early estimates reflect the impact of around six weeks of lockdown in which large parts of the UK were shut. But economists say the full effect on employment will not be felt until wage support schemes end in October.
The economy has taken a major hit, and despite the most expensive bailout and support package in British economic history, the landscape is looking bleak for the future of industry, and in particular, the Construction Sector. Add in the complexities of Brexit, and this equates to one massive toxic commercial challenge to face!
[/cs_text][x_gap size=”30px”][cs_element_headline _id=”10″ ][/cs_element_column][cs_element_column _id=”11″ ][x_image type=”none” src=”https://www.thebusinessboard.co.uk/wp-content/uploads/2020/06/construction-1510561_1920.jpg” alt=”” link=”false” href=”#” title=”” target=”” info=”none” info_place=”top” info_trigger=”hover” info_content=””][/cs_element_column][/cs_element_row][cs_element_row _id=”13″ ][cs_element_column _id=”14″ ][x_gap size=”30px”][cs_text]With that being the case, how will the Construction Industry stack up, and emerge from what some analysts are predicting to be imminent financial Armageddon. That remains to be seen, as every day seems to bring about more damaging changes and fluctuating fortunes.
The construction industry has been operating on tight margins for years, and without a doubt, the recent downturn in revenue will put businesses under more pressure than ever. Unfortunately, some will go bust! There will be threats and opportunities, and this will create winners and losers.
Last week, the Bank of England published the UK’s output figures for April, and it came out with some sobering facts, showing that the overall economy dropped by 20.4%. The worst in the banks 300-year history. The graph below shows the stark contrast to the previous months:[/cs_text][cs_element_gap _id=”17″ ][x_image type=”none” src=”https://www.thebusinessboard.co.uk/wp-content/uploads/2020/06/Growth-rate-cons..png” alt=”” link=”false” href=”#” title=”” target=”” info=”none” info_place=”top” info_trigger=”hover” info_content=””][cs_element_gap _id=”19″ ][/cs_element_column][/cs_element_row][cs_element_row _id=”20″ ][cs_element_column _id=”21″ ][cs_icon_list][cs_element_gap _id=”23″ ][cs_text _order=”0″]UK construction activity declined at the fastest pace since the financial crisis in as many builders halted work and cut jobs as coronavirus hit the economy
A recent IHS Markit purchasing managers’ index for UK construction dropped to 39.3, marking the lowest reading in more than 10 years. As measures to contain the Covid-19 pandemic were put in place across the UK, construction sites closed, and builders lost their jobs on a frightening scale as overall activity fell to an extent not seen since April 2009.
The UK construction sector, which employs 2.4m workers and produces about 6 per cent of the country’s total economic output, had struggled amid high Brexit uncertainty, but activity recovered at the start of the year.
The government allowed construction work to continue latterly during the coronavirus crisis, but workers in the sector were cut at the fastest pace since September 2010. Civil engineering and commercial activity were the hardest hit’ A combination of weaker demand and concerns among clients has hit the sector.
Residential activity fell at a comparatively modest pace. However, many builders expect a further slowdown in house building in the months ahead as potential house buyers remain uncertain about their own future, due to job uncertainty.
[/cs_text][cs_element_headline _id=”25″ ][cs_element_gap _id=”26″ ][cs_text _order=”0″]In the meantime, as lockdown is increasingly eased, what can you do now can you protect your interests, your company, staff, and family? How can you get through the other side of the impending challenges?
Don’t stand by and hope that your business will just survive. At The Business Board, our strategies will help get you through the dark days ahead.
Our extensive range of business support services, from financing options that will immediately improve your cash flow, to mentoring for business improvement, including buying / selling, cost reviews, supply chain management and mergers & acquisitions.
Our team of construction industry specialists have extensive business experience and can work with you to implement a range of strategies to help you get through the next few months, stabilise your business and move forward for the future.
In June, as we emerge from lockdown, we are focussing on finance options, and offering excellent rates on invoice discounting to get you over the short-term issues of managing cashflow.
Additionally, if we can offer support and guidance with our other services, please do not hesitate to contact us.
If you are interested in finding out more about Construction Finance Solutions, email us at: info@thebusinessboard.co.uk or call our office on 0118 338 1818.
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0118 338 1818
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