As March the 26th hit and the UK went into lockdown to fight against the COVID-19 pandemic, the construction industry was hit with another setback; as many non-essential construction sites were forced to postpone projects and securely close their sites for the foreseeable future.
When looking at the monthly IHS Markit/Cips snapshot, it shows the main construction activity index had fallen from 39.3 in March to a staggering 8.2 in April. April’s data actually shows the lowest figures since they were first collected back in April 1997 and lower than its previous low mark of 27.8 back in 2009 during the height of the financial crisis.
According to Tim Moore, Economics Director at IHS Markit, “A drop in construction activity of historic proportions in April looks set to be followed by a gradual reopening of sites in the coming weeks, subject to strict reviews of safety measures. However, the prospect of severe disruption across the supply chain will continue over the longer-term.”
The construction industry has always been an indicator for economic change, whether locally or globally, but it’s also been the fastest to recover after adversity. Back in 2008 when the great recession hit, the construction market had practically changed overnight. With people more conscious about sticking to budgets, over time sales professionals shifted their approach to become more business-development oriented instead of only focusing their efforts on transactions with the biggest revenue.
So once again, during this COVID-19 outbreak, the construction industry finds itself wondering what a ‘new normal’ will look like?
When we look at what’s already happened to the construction industry, we’ve unfortunately seen job losses, companies dissolving, and new companies being formed due to mergers and acquisitions in order to pool resources.
One major modification for construction sites will be the heightened health and safety guidelines that must be adhered to. Projects and sites were put on hold whilst the UK went into lockdown as close contact on construction sites is and was inevitable. The Health and Safety Subgroup of the CEF Covid-19 Taskforce has compiled resources to assist construction companies to safely operate within this new environment. Construction physically won’t be able to operate as they had before this pandemic, and so adapting and reviewing ways of working to include these guidelines will become the new normal.
The introduction of digital transformation into standards, practices and processes for the construction industry will be part of another change in the way we work. During our time in lockdown we have seen the rise or demise of companies solely on their digital capabilities. Face to face meetings have now turned into virtual conference calls, allowing for greater collaboration. We must start to trust the technology we have at our disposal during this technology transition as decades ago we wouldn’t have had these options.
During this crisis, it has highlighted the fragmented nature of our supply chains here in the UK. Even with many construction sites and projects starting back up, border closures and countries still quarantining workforces could still have a major impact when adjusting to a new normal. The structure of our supply chains could explain our preparedness for such a crisis. Re-evaluating supply chains means embracing digitalisation to optimise production capacity and adapt to any future disruptions.
When it comes to construction, the industry has proved itself during adversity; collaborating, innovating and delivering against tight deadlines through the sheer inspirational production of the much-needed Nightingale hospitals.
Ultimately, Covid-19 has completely changed the way construction sites and the world will live and operate. So, our question over the next days, months and years is how will the construction industry adapt and normalise these guidelines?