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June, 2nd 2020

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APR 06
16:39

UK construction activity falls off cliff in March

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The UK construction sector saw rapid falls in both output and new work in March, according to the latest IHS Markit/Chartered Institute of Purchasing and Supply (CIPS) survey monitored by Kallanish. Employment fell at the fastest pace since September 2010 while business expectations slumped to the weakest since October 2008.

The headline seasonally-adjusted IHS Markit/CIPS UK Construction Total Activity Index dropped to 39.3 in March from 52.6 in February, to signal the steepest fall in construction output since April 2009. Survey respondents overwhelmingly attributed reduced activity to the impact of the Covid-19 pandemic.

Both the steel-intensive sub-sectors of civil engineering and commercial building recorded a fall in output during March. Civil engineering activity (index at 34.4) saw the steepest rate of decline, followed closely by commercial building work (index at 35.7). The steep fall in commercial building will affect UK demand for sections and rebar.

Lower workloads and business closures resulted in a marked reduction in staffing numbers across the construction sector during March. “The latest survey indicated the steepest pace of job shedding since September 2010,” Markit/CIPS says.

The latest data also indicated a slump in business expectations across the UK construction sector. Survey respondents are more pessimistic about the year ahead outlook than at any time since October 2008.