As many businesses closed their doors for the second nationwide lockdown this week, the Guardian reported that the construction sector was brightening the economic gloom in the UK.
Phillip Inman wrote that: “With the services and manufacturing sector suffering a sharp slowdown, building firms continued to bounce back from a contraction in spring that followed the UK coronavirus lockdown.”
In October, we featured an Advantage blog post on how SMEs in the construction industry were experiencing a ‘bounce back’ in workloads. And with many other sectors having to shut down, at least for the next four weeks, construction sites will remain open.
Construction News reported that, in his address to the nation on Saturday, Prime Minister Boris Johnson said that the sector should continue operating during the new period of restrictions, set to run from Thursday (5th November) until 2nd December. He said: “The virus is spreading even faster than the reasonable worst-case scenario of our scientific advisers […] so now is the time to take action because there is no alternative. Workplaces should stay open for where people can’t work from home, for example in the construction and manufacturing sectors.” Housebuilding has been particularly resilient this year.
Here’s what Advantage wrote about housebuilding in the summer:
The cut in stamp duty and pent-up demand following the UK lockdown has driven a sharp surge in house buying which has surprised some analysts. Looking ahead to autumn and winter, the current economic uncertainty is making it much more difficult than usual for experts to predict the direction of travel for house prices. It seems likely that in the short term, demand will ease somewhat. However, Halifax’s summer figures and Really Moving’s projected figures do provide some grounds for optimism that should we see the UK economy and jobs market stabilise over the coming months, there could be the potential to move from a mini housing boom to a more sustained return to growth for the UK housing market.
Here’s what we think now:
Duncan Brock, Cips’ group director, was quoted by the Guardian this week, stating that: “The strength of the pipeline of new work especially from a robust housing market means the (construction) sector is moving in the right direction and hopeful of getting through the winter unscathed.” House prices reached record highs in the summer and, as the property market will remain open during the second lockdown, it is anticipated that house prices could continue to increase (although potentially at a slower rate than we saw in summer). The temporary holiday on stamp duty will remain in place until 31st March and it is likely that demand will increase as we near the March deadline. Reflecting this healthy level of demand, house building will potentially continue to out-perform other areas of construction this winter.