Almost every industry has been affected by the worldwide pandemic in some way. The construction sector has been no exception. With lower demand and poor confidence in the industry, construction companies have had to find solutions fast. To avoid terminating contracts, the industry was forced to turn to furloughs amidst the crises. According to the New Civil Engineer, around 30,000 construction workers are currently getting lower pay packets, many of them having been furloughed. This temporary leave of employees offers a welcome relief to the thousands of construction workers currently facing no employment; However, furlough leave is affecting the UK’s construction industry in other ways.
The current situation of the construction market
Since the lockdown was enforced in March, the UK construction market has seen an incredible decline, with widespread shutdowns of the entire supply chain. This is due to the demand falling at an unprecedented rate; Most investors are not willing to start new projects and others have halted plans in progress. The stern safety measures have also been a challenge for contractors. Many are forced to temporarily suspend their on-site activities to protect their workforce from the spread of the virus, while those who fail to adhere to measures face fines. To try to secure their financial future, many are now working with smaller teams and less capital, even though it is significantly hampering productivity.
Large scale furlough
According to The Office for National Statistics, a whopping third of the construction industry’s staff has been furloughed in May 2020. Only around 14% of furloughed construction workers have returned to work. This is the result of 38% of construction companies sawing their turnover decreased by more than 50% during that period. Now, as a relief solution, the UK government has extended its furlough workers scheme to help 680,000 employees with £1.8bn during the COVID-19 outbreak.
As the lockdown is slowly being lifted, a few challenges arise: Is there enough demand to allow furloughed workers back into the workforce? And when will companies be able to afford to start paying furloughed workers again?
The future of the construction market
The current situation paints a bleak picture. Even when the volatile economy stabilizes, it could take years for investors and property owners to regain confidence. Fortunately, there are certain plans in place to support the industry. The Construction Leadership Council’s (CLC) has planned a recovery roadmap for the construction market in the UK and it includes three key phases:
Restart
For up to three months the emphasis will be placed on increasing the output by maximising employment opportunities and minimising the disruption.
Reset
For up to twelve months, the demand will be boosted and productivity increased, while the supply chain’s capability will be strengthened.
Reinvent
In the next two years, the industry will be transformed with more productive collaborations and partnerships. The UK construction market is currently under a lot of strain, as investors halt plans and property owners delay projects. In this uncertain time, confidence needs to be restored to get the derailed industry back on track. With the CLC’s plan in place and the furlough payments scheme bringing relief to workers, there may be light at the end of the tunnel, however, the effectiveness of these solutions may only be visible in some time